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Dollar Settles and Market Awaits U.S. Inflation Data

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USD

Despite strong US data, the US dollar settled lower yesterday vs. a basket of major currencies for the second day in a row as investors reacted to Donald Trump's decision to fire FBI Director James Comey.

  • The dollar index (DXY), which measures the Greenback against a basket of currencies, settled at 99.50, in anticipation of the U.S. data, which will be released by today.

The markets await the US inflation data and Consumer Price Index for April, following the decline in the US job report. Good data could push the Federal Reserve to tighten its monetary policy.

JPY

The greenback failed to manage its gains vs. its Japanese counterpart, with heightened political concerns in the US, after President Donald Trump fired FBI Director James Comey. USD settled below ¥114 in anticipation of important data, which are the USD Consumer Price Index and USD Advance Retail Sales.  A higher than expected reading may be bullish for the USD.

GBP

The Sterling pound declined yesterday vs. its American peer as the UK industrial production shrank in March. Meanwhile the Bank of England voted to keep rates unchanged.

Gold

Gold pared its losses and settled at $1,225. Technically, the yellow metal could be affected by the US data, which will be released by today. A higher than expected reading maybe bearish for the precious metal.

Oil

Oil prices rose yesterday, on the back of a decline in US inventories and rising hopes that OPEC could extend its oil cut deal.

The most important economic events:

  • USD Advance Retail Sales (APR): (GMT 12:30) – Important – Forecast (0.6%) – Previous (-0.2%).
  • USD Consumer Price Index Ex Food & Energy (YoY) (APR): (GMT 12:30) – Important – Forecast (2.0%) – Previous (2.0%).
  • USD U. of Michigan Confidence (MAY P): (GMT 14:00) – Important – Forecast (97) – Previous (97).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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