Next, what you need to know on Monday, May 19:
The news about the substantial progress of the United States and China in commercial conversations this past weekend raises the feeling of risk on Monday. In the absence of high -level macroeconomic data publications, investors will examine the holders related to the relations between the US and China and will pay special attention to the comments of the central bankers.
US dollar last 7 days
The lower table shows the percentage of change of the US dollar (USD) compared to the main currencies last 7 days. US dollar was the strongest currency against the Swiss Franco.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.95% | -0.24% | 0.91% | 0.87% | 0.27% | 0.32% | 0.99% | |
| EUR | -0.95% | -0.90% | 0.25% | 0.19% | -0.40% | -0.35% | 0.31% | |
| GBP | 0.24% | 0.90% | 0.91% | 1.08% | 0.50% | 0.55% | 1.22% | |
| JPY | -0.91% | -0.25% | -0.91% | -0.05% | -0.64% | -0.52% | 0.18% | |
| CAD | -0.87% | -0.19% | -1.08% | 0.05% | -0.89% | -0.54% | 0.12% | |
| Aud | -0.27% | 0.40% | -0.50% | 0.64% | 0.89% | 0.05% | 0.71% | |
| NZD | -0.32% | 0.35% | -0.55% | 0.52% | 0.54% | -0.05% | 0.66% | |
| CHF | -0.99% | -0.31% | -1.22% | -0.18% | -0.12% | -0.71% | -0.66% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the US dollar of the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box will represent the USD (base)/JPY (quotation).
After the first round of official conversations between representatives of China and the US in Switzerland, US Treasury Secretary, Scott Besent, said they had “productive and constructive” discussions, while the Vice Prime Minister of China, He Lifeng, described the conversations as “deep” and sincere. Besent is expected to share more details at 07:00 GMT on Monday.
Reflecting the improvement of the market mood, the futures of the US stock market rates were rising between 1% and 2%. Meanwhile, the dollar index remains in positive territory above 100.50 after closing the third consecutive week marginally upwards. On Tuesday, the US Labor Statistics Office will publish consumer price index (CPI) for April.
The gold It is still under bearish pressure at the beginning of Monday and quotes in a new weekly minimum below $ 3,300.
EUR/USD Fight to gain traction and remain in negative territory below 1,1250 at the beginning of the European session.
After starting the week with a small bullish hole, USD/JPY Continue to rise and quote on its strongest level in a month about 146.00.
GBP/USD It remains relatively calm on Monday and fluctuates in a narrow channel around 1,3300. The United Kingdom National Statistics Office will publish April employment data on Tuesday.
Despite the renewed strength of the USD, AUD/USD It remains firm and clings to modest daily advances above 0.6400 on Monday.
USD/CAD It remains in a consolidation phase above 1,3900 after climbing almost 1% in the previous week. Canada’s data showed on Friday that the unemployment rate rose to 6.9% in April from 6.7% in March.
FAQS risk feeling
In the world of financial jargon, the two terms “appetite for risk (Risk-on)” and “risk aversion (risk-off)” refers to the level of risk that investors are willing to support during the reference period. In a “Risk-on” market, investors are optimistic about the future and are more willing to buy risk assets. In a “Risk-Off” market, investors begin to “go to the safe” because they are concerned about the future and, therefore, buy less risky assets that are more certain of providing profitability, even if it is relatively modest.
Normally, during periods of “appetite for risk”, stock markets rise, and most raw materials – except gold – are also revalued, since they benefit from positive growth prospects. The currencies of countries that are large exporters of raw materials are strengthened due to the increase in demand, and cryptocurrencies rise. In a market of “risk aversion”, the bonds go up -especially the main bonds of the state -, the gold shines and the refuge currencies such as the Japanese yen, the Swiss Franco and the US dollar benefit.
The Australian dollar (Aud), the Canadian dollar (CAD), the New Zealand dollar (NZD) and the minor currencies, such as the ruble (Rub) and the South African Rand (Tsar), tend to rise in the markets in which there is “appetite for risk.” This is because the economies of these currencies depend largely on exports of raw materials for their growth, and these tend to rise in price during periods of “appetite for risk.” This is because investors foresee a greater demand for raw materials in the future due to the increase in economic activity.
The main currencies that tend to rise during the periods of “risk aversion” are the US dollar (USD), the Japanese yen (JPY) and the Swiss Franco (CHF). The dollar, because it is the world reserve currency and because in times of crisis investors buy American public debt, which is considered safe because it is unlikely that the world’s largest economy between in suspension of payments. The Yen, for the increase in the demand for Japanese state bonds, since a great proportion is in the hands of national investors who probably do not get rid of them, not even in a crisis. The Swiss Franco, because the strict Swiss bank legislation offers investors greater protection of capital.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
