What you need to know on Friday, May 9:
Comments from different Fed officials dampened expectations of higher rates in the US, leading to persistent weakness in the dollar. The US currency fell against all of its major rivals, particularly weak against safe-haven rivals. Federal Reserve Bank of Dallas Chairman Robert Kaplan said he would like to start talking about the reduction sooner rather than later, but he is not a voting member.
Wall Street advanced, with the DJIA settling at all-time highs. European indices also rose. Yields on US Treasuries, on the other hand, declined, with the 10-year yield down 1.55%.
The shared currency advanced modestly as EUR / USD settled at 1.2060, despite upbeat local data. GBP / USD ended the day below 1.3900 after the BOE failed to impress. The central bank left the benchmark interest rate unchanged at 0.10% and held the Asset Purchase Facility steady at £ 895bn, as widely expected. The BOE also slowed down the pace of weekly bond purchases and expects purchases to end by the end of 2021. Finally, policy makers revised upward growth and inflation forecasts, as they now expect GDP to reach 7.25% in 2021 and 5.75% in 2022 and average inflation of 25% in 2021.
The AUD / USD pair is approaching the 0.7800 figure, while the USD / CAD plunged to 1.2160. Gold soared to 1,818, its highest level since last February, while crude oil prices fell and the WTI closed the day at $ 64.80 a barrel.
Data related to employment in the United States surprised to the upside. Challenger job cuts declined to 22,913 in April, while initial jobless claims for the week ending April 30 came in at 498,000, better than the 540,000 expected. Non-farm productivity in the first quarter increased 5-4%, while unit labor cost in the same period decreased 0.3%. The data is relevant ahead of the US nonfarm payroll report to be released on Friday.
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