Market sentiment is cautiously positive today, boosted by weaker-than-expected US Core CPI and a downbeat NY Empire State Manufacturing Index, which challenge the Fed’s hawkish stance. This gives risk-takers a chance to recover losses. Positive signs from major economies, China’s stimulus, and mixed geopolitical tensions also help the mood. However, Fed officials are hesitant about rate cuts, and the Fed's Beige Book suggests a moderate economic transition, which could complicate policy adjustments and test the mood. Anxiety about this week’s key events also affects trading momentum.
Against this backdrop, the US Dollar Index (DXY) steadies near a one-week low, pausing its three-day losing streak, while Gold retreats from its weekly high, posting its first intraday loss in three days.
EURUSD remains subdued after retreating from a one-week high, unable to capitalize on the softer US Dollar, while GBPUSD ends its three-day winning streak.
USDJPY dips to a one-month low, and AUDUSD, NZDUSD, and USDCAD trim weekly gains. Crude Oil pulls back from a six-month high, erasing its biggest daily jump in a week. Meanwhile, cryptocurrencies consolidate recent gains, and equities edge slightly higher.
EURUSD struggles to benefit from the US Dollar's weekly decline amid growing fears of a deeper economic contraction in Germany and mixed signals from ECB officials. Traders remain cautious ahead of the ECB Monetary Policy Meeting Accounts and US Retail Sales data. Political instability within the Eurozone also adds pressure on the pair, while the US Dollar faces a mixed market response.
GBPUSD posts its first loss in three days as weak UK inflation signals and dovish comments from BoE official Alan Taylor weigh on the British Pound. A mixed batch of UK economic data adds to the uncertainty, keeping traders cautious ahead of the key US Retail Sales report.
Meanwhile, USDJPY falls for the second day, hovering near a one-month low. The pair reacts to stronger Japanese inflation data, hawkish comments from BoJ Governor Kazuo Ueda, and reports suggesting a potential rate hike by the Bank of Japan next week.
The Australian, Canadian, and New Zealand Dollars halt their three-day rally against the US Dollar as traders await key US data. Pressure on these commodity-linked currencies comes from rising expectations of rate cuts by their central banks, ongoing concerns about China’s economy, and mixed economic data from Australia and New Zealand. Notably, USDCAD rebounds despite stronger crude oil prices, Canada’s primary export.
The US Dollar's recovery and mixed market sentiment pressure Gold buyers while prompting Crude Oil to retreat from its six-month high. Earlier, Crude Oil gained on a larger-than-expected inventory drawdown, Middle East geopolitical tensions, and OPEC’s upbeat energy demand forecast.
Cryptocurrencies halt their rebound as cautious market sentiment weighs ahead of key economic data and regulatory concerns. Bitcoin (BTCUSD) posts its first loss in four days, while Ethereum (ETHUSD) ends a two-day winning streak amid rising interest in Trump-linked tokens and increased staking withdrawals.
Today’s trading session is set to stay lively with the ECB meeting minutes and US Retail Sales taking center stage. Other key events include US Jobless Claims, the Philadelphia Fed Manufacturing Survey, and speeches from ECB and Fed officials.
With mixed US inflation data and weak EU statistics, EURUSD may stay under pressure unless major surprises emerge. Even then, renewed hawkish Fed expectations could help the US Dollar recover recent losses.
Gold may attempt a rebound, while Crude Oil and commodity-linked currencies could face further profit-taking. Cryptocurrencies are likely to edge higher, but equities might give up some of their weekly gains.
May the trading luck be with you!
