Next, what you need to know on Friday, May 16:
The markets adopt a cautious posture early on Friday and the US Dollar (USD) It is difficult to stay firm in front of its main rivals. The construction data and construction permits of April will be in the US economic calendar. In addition, the University of Michigan will publish the preliminary consumer’s feeling index for May.
US dollar price this week
The lower table shows the percentage of the US dollar change (USD) compared to the main currencies this week. US dollar was the strongest currency against the Canadian dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.37% | -0.04% | -0.67% | 0.40% | -0.16% | 0.21% | -0.02% | |
| EUR | -0.37% | -0.28% | -0.47% | 0.51% | 0.08% | 0.33% | 0.09% | |
| GBP | 0.04% | 0.28% | -0.04% | 0.81% | 0.38% | 0.53% | 0.37% | |
| JPY | 0.67% | 0.47% | 0.04% | 1.06% | -0.13% | 0.02% | 0.41% | |
| CAD | -0.40% | -0.51% | -0.81% | -1.06% | -0.30% | -0.19% | -0.42% | |
| Aud | 0.16% | -0.08% | -0.38% | 0.13% | 0.30% | 0.14% | -0.03% | |
| NZD | -0.21% | -0.33% | -0.53% | -0.02% | 0.19% | -0.14% | -0.26% | |
| CHF | 0.02% | -0.09% | -0.37% | -0.41% | 0.42% | 0.03% | 0.26% |
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).
The USD index dropped slightly during American negotiation hours on Thursday after the labor statistics office reported that the production price index rose 2.4% in annual terms in April, compared to the 2.7% increase recorded in March. Other US data showed that retail sales increased 0.1% in monthly terms in April, while initial weekly unemployment applications were 229,000, matching the previous reading and market expectation. After losing 0.2% on Thursday, the USD index remains down and descends around 100.50 on Friday morning. Meanwhile, the futures of the US stock market rates quote mixedly.
Japan’s data showed that the gross domestic product contracted at an annual rate of 0.7% in the first quarter. This figure was worse than the analysts of an 0.2%contraction. After closing in negative territory for three consecutive days, USD/JPY It is maintained under bearish pressure and quotes in a new weekly minimum slightly above 145.00.
Gold He staged a decisive rebound in the second half of the day on Thursday and won almost 2%. The Xau/USD reverses its address on Friday and falls to $ 3,200.
EUR/USD It remains relatively quiet and continues to move up and down on a narrow channel about 1,1200 on Friday morning. Eurostat will publish the commercial balance data for March.
GBP/USD He won more than 0.3% on Thursday and erased the losses of Wednesday. The pair seems to have entered a consolidation phase around 1,3300.
The New Zealand reservation bank reported that inflation expectations rose to 2.29% for the second quarter from 2.06% in the previous quarter. NZD/USD It rises more than 0.5% on Friday and quotes above 0.5900.
Manufacturing sales in Canada fell 1.4% in monthly terms in March, Statistics Canada reported Thursday. USD/CAD Marginally quote down on the day about 1,3950 after registering small losses on Thursday.
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.
