News

Dollar Plummets Following a 2-Year Peak

USD

The dollar index which measures the greenback against a basket of major currencies retreated from a two-year high of 98.38 to trade at a low of 97.70 following weaker-than-expected economic data. The preliminary Services and Manufacturing PMI dropped to 50.9 and 50.6, respectively. Moreover, the New Home Sales plunged 6.9% in April. On the other hand, the escalating trade tensions between China and the United States are raising concerns over the performance of the US economy in the future which could force the Federal Reserve to ease its monetary policy. The chances of an interest rate cut increased, and the US 10-year yields tumbled to 2.29%, the lowest since December 2017. The USDJPY plunged to 109.46, and the EURUSD soared to $1.1205 after trading near a two-year low at $1.1107.

Metals

Metals prices edged higher as the dollar tumbled along with Treasury yields. The price of a gold ounce climbed to a one-week high of $1287, the silver ounce climbed to a high of $14.63, and palladium rallied higher to $1327.

Oil

Oil prices finished sharply lower amid growing concerns over the global economic outlook as the trade tensions between China and the United States intensified. A full-blown trade war between the world's two largest economies could deteriorate the global economy. On the other hand, the Manufacturing PMI from Asia, Europe, and the US were weaker, signaling a drop in the manufacturing activity. The West Texas Intermediate crude futures tumbled to a ten-week low of $57.33, and Brent futures declined to $66.99.

Major Economic Events

GMT Country Event Expectation Previous

8:30

UK

Core Retail Sales (YoY) (Apr)

4.2%

6.2%

12:30

US

Core Durable Goods Orders (MoM) (Apr)

0.2%

0.2%

Tentative

EU

European Parliament Elections

 

 

 

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