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MTrading Team • 2023-05-25

EURUSD renews multi-day low as US Dollar marches amid skittish markets

EURUSD renews multi-day low as US Dollar marches amid skittish markets

Risk profile turns slightly positive during early Thursday as negotiations about the US debt ceiling extension progress. Even so, the nearness to a long weekend and policymakers’ hesitance to let go of their demands keep traders on their toes ahead of the looming US default.

With this, the US stock futures and yields grind higher while the US Dollar manages to refresh a two-month high, despite mixed Fed Minutes. The same weighs on the prices of EURUSD and Crude Oil but the Gold remains mildly bid due to its safe-haven appeal. It should be observed that Germany’s downward revision of Q1 GDP renews recession fears in the bloc and exert additional downside pressure on the Euro.

USDJPY struggles to justify upbeat yields and firmer Dollar as markets reassess BoJ’s dovish stand after recent upbeat Japan data. Further, GBPUSD drops to a seven-week low but prices of USDCAD and USDCHF remain elusive of late.

Elsewhere, BTCUSD and ETHUSD stay pressured at the lowest levels in a fortnight as US institutional investors show signs of bullish exhaustion.

Following are the latest moves of the key assets:

  • Brent oil snaps three-day uptrend with minor losses near $78.00 at the latest.
  • Gold price licks its wounds at weekly low, mildly bid at $1,960 as we write.
  • USD Index prints the fourth consecutive daily gain around 104.00 by the press time.
  • Wall Street closed with minor losses and so did the Asia-Pacific shares. However, equities in Europe and the UK remain offered during the initial hour.
  • BTCUSD and ETHUSD ink minor losses around $26,200 and $1,780 as we write.
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US Dollar is the king…

Despite market’s mixed feelings about the US default, the US Dollar remains firmer as traders seek solace in the traditional safe havens. The same allows the Gold price to remain firmer while helping the JPY to jostle with the upbeat greenback.

That said, the Oil remains depressed and the EURUSD also bears the burden of economic fears, in addition to the Fed versus ECB play.

On a different page, GBPUSD fails to justify BoE’s hawkish mood while USDCAD, USDCHF and Asian shares remain lackluster as traders await a slew of the US data and the policymakers’ final push to get the much-awaited debt ceiling deal.

Elsewhere, China’s crypto optimism and expectations of a boom in the top-tier e-assets by the Western players exert downside pressure on the BTCUSD and ETHUSD, especially amid regulatory fears and liquidations of major trading positions.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

Too much data but little importance

Looking forward, a line of the second-tier US data flashing signs about inflation and growth are up for publishing but major attention will be given to the US debt ceiling negotiations and the Fed talks. Should the policymakers manage to seal the deal, the market sentiment can improve and may help the US Dollar to retreat after an initial jump. On the contrary, the US Dollar could keep the top spot of the bulls.

May the trading luck be with you!