This is what you need to know to trade today friday may 6:
Following the downward correction seen after the Fed’s monetary policy announcement on Wednesday night, the US dollar index DXY rose on Thursday and hit its highest level since December 2002 at 103.94. The 10-year US Treasury bond yield rose more than 3% and the S&P 500 fell 3.6%.
US April NFP Non-Farm Payrolls data, expected to hit 391,000, will be the last significant data release for the week. Market participants will be paying attention to speeches from Bank of England (BoE) and Fed policymakers throughout the day. Finally, the Canadian employment report will be searched for new catalysts.
See: NFP Forecast: Could Employment Become a New Headache for the Fed?
The The Bank of England (BoE) announced on Thursday that it was raising the rate by 25 basis points to 1%. as expected. Although the monetary policy statement revealed that three members of the Monetary Policy Committee voted for a 50 basis point rate hike, the pound sterling was under strong downward pressure. The BoE warned that the UK economy could enter a recession and Gov. Andrew Bailey noted there was a “very sharp slowdown” in activity. Finally, the central bank clarified that it will work on a plan to start selling the government bonds it has bought since the beginning of the crisis.
The EUR/USD it erased all the gains it made on Wednesday and is now testing the 1.0500 level. The member of the Governing Council of the European Central Bank, Olli Rehn, argued on Thursday that the monetary policy rate could reach zero in the fall, with the first rate hike in July. However, these comments did not help the common currency find demand.
The GBP/USD it is trading at its lowest level since June 2020 around 1.2300 on Friday. The pair has dropped more than 250 pips in the week.
The USD/JPY regained its traction on rising US Treasury yields and snapped a two-day losing streak on Thursday. The pair is now posting modest daily gains near 130.50.
The Prayed it jumped above $1,900 on Thursday but turned 180 in the second half of the day to close deep in negative territory. XAU/USD remains relatively calm near $1,870 in European morning trading.
See: April Non-Farm Payroll Preview: Analyzing Gold’s Reaction to NFP Surprises
The Bitcoin fell almost 8% on Thursday amid risk aversion and entered a consolidation phase near $36,300. The ethereum lost 6.5% and is now trading sideways around $2,700.
Source: Fx Street
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