This is what you need to know to trade today Wednesday May 4:
After choppy action on Tuesday, markets remain calm on Wednesday as investors move on the sidelines ahead of the US Federal Reserve’s monetary policy announcement. The US dollar DXY index continues to move sideways near 103.50 and the 10-year US Treasury yield is fluctuating in a tight range below 3%. The European economic calendar will include March retail sales data from the eurozone. Also, the April ADP report and the US ISM Services PMI could provide further momentum at the start of the American session.
See: April ADP Employment Change Preview: Will Employment Threaten Fed Rate Hikes?
The President of the European Commission, Ursula von der Leyen, said early on Wednesday that to phase out Russian supply of crude oil and refined products by the end of the year. Von der Leyen has further added that Sberbank and other major Russian banks will be excluded from the SWIFT system as part of the latest sanctions package.
It is expected that the Fed raises its monetary policy rate by 50 basis points and unveils its balance sheet reduction plan. FOMC Chairman Jerome Powell will make his comments on the political and economic outlook at a press conference at 18:30 GMT.
See: Fed Preview: Buying the Falling Dollar and Three Other Scenarios as Powell Shows His Might
See: May Fed Preview: ‘Less optimism’ is the new pessimism
Meanwhile, Beijing has announced earlier in the day that it has closed more than 40 subway stations and 158 bus routes to limit the spread of the coronavirus. In addition, it is said that Zhenzhou will begin to apply strict restrictions against coronavirus starting next week. Meanwhile, Reserve Bank of New Zealand Governor Adrian Orr said earlier in the day that cannot rule out a global recession in the coming months. However, US stock index futures post small gains at the start of the European session, but market sentiment is likely to remain cautious ahead of the Fed event.
The EUR/USD continues to fluctuate above 1.0500 on Wednesday but remains on the defensive with the Euro Stoxx 600 Index losing almost 0.5% early in the European session.
The GBP/USD bounced back on Tuesday but erased daily gains after hitting resistance at 1.2570. The pair is now moving sideways near 1.2500.
The Prayed is rising towards $1,870 at the start of the European session on Wednesday, but is struggling to gain any upside momentum as US Treasury yields hold steady.
The USD/JPY trades in an extremely tight range near 130.00 for the third day in a row on Wednesday.
The Bitcoin it is up over 2% on Wednesday but continues to trade below the key $40,000 level. After losing almost 3% on Tuesday, the ethereum has regained its traction and is now up 1.5% on the day at $2,820.
Source: Fx Street
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