This is what you need to know to trade today Monday May 23:
After posting weekly losses for the first time since early March last week, the US dollar index remains on the warpath early Monday, with the greenback struggling to find demand in a risk-friendly market environment. . Market participants will closely watch the German IFO data during the European session. Later, the Federal Reserve Bank of Chicago will release its national activity index for April. Meanwhile, the annual meeting of the World Economic Forum gets underway in Davos, Switzerland.
With risk flows dominating the markets, US stock index futures rise between 1% and 1.6% in the European morning. The 10-year US Treasury bond yield is up almost 2% on the day, up from 2.8%. Speaking in Tokyo on Monday, US President Joe Biden reiterated that they were considering lowering tariffs on China, adding that a US recession was “not inevitable.”
Over the weekend, Reuters reported that Shanghai’s central Jingan district, a key commercial area in the Chinese financial hub, will force all supermarkets and shops to close and residents to stay home for mass testing until Tuesday. In addition, the city of Beijing reported 99 new coronavirus cases on Sunday, up from 61 on Saturday, reigniting concerns about authorities imposing stricter restrictions. However, these events do not seem to have a significant impact on the perception of risk so far this day.
The EUR/USD it regained its traction during Asian trading hours and rose above 1.0600 in the early hours of the European session. European Central Bank President Christine Lagarde said a rate hike in July was likely, but played down the idea of a 50 basis point rate hike amid uncertainty surrounding the economic outlook.
The GBP/USD It is trading at its highest level in more than two weeks, above 1.2550. UK data earlier in the day showed that the Rightmove House Price Index rose 2.1% on a monthly basis in May.
Despite widespread selling pressure surrounding the dollar, the USD/JPY trades in a relatively tight range below 128.00, supported by rising US Treasury yields.
The Prayed It continues to rise and trades slightly above $1,850, having closed slightly above the 200-day SMA on Friday.
The AUD/USD it is already up more than 1% on Monday and was last seen near 0.7120. The deputy governor of the Reserve Bank of Australia (RBA), Christopher Kent, said earlier in the day that they will slowly let the acquired assets mature and that they do not plan to sell their holdings. However, the pair managed to retain its bullish momentum despite these comments.
Bitcoin rallied over the weekend and closed the week slightly above $30,000. The last time he was seen BTC/USD he was holding on to small daily profits of around $30,500. The ethereum reclaimed the critical $2,000 level on Sunday and appears to have entered a consolidation phase near $2,050 early on Monday.
Source: Fx Street
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