The Greenback Settles

On Monday, the Greenback recovered slightly and was traded in a limited range as several markets in the U.S., Asia and Europe closed for the May Day holiday ahead of the two-day Federal Reserve policy meeting. However, the U.S. dollar was supported after the U.S. Congress confirmed a huge $1 trillion-plus spending bill that avoids a government shutdown, as it will fund most government operations through September.

  • The dollar index .DXY, which measures the greenback against a basket of currencies, settled at 99 pips in anticipation of the Federal Open Market Committee Meeting.

Euro managed to settle above $1.09 vs. USD as the U.S. factory activity slowed in April dropped to 54.8 in April,  while the U.S. consumer-spending index was unchanged in March.

Technically, the common currency could re-test $1.10 ahead of the FOMC statement, which will be released this Wednesday. 

Gold prices declined to $1,255 yesterday, as the chance of the U.S. government shutdown reduced. Technically, the yellow metal could manage to trade above $1,245 in anticipation of the two-day Federal Reserve policy meeting. Meanwhile, FOMC officials could keep interest rates unchanged after weaker-than-expected U.S. economic growth data for Q1 of 2017.

Oil prices fell as much as 1% yesterday as the output in Libya has reached the highest levels since December 2014 and as more oilrigs were added in the United States. U.S. crude settled below $49 and could decline further to $48.50 in anticipation of the U.S. inventories.

The most important economic events:

  • NZD Employment Change (YoY) (1Q): (22:45) – Important – Forecast (5.3%) – Previous (5.8%).

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.

CFDs and Spot FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Your profit and loss will vary according to the extent of the fluctuations in the price of the underlying markets on which the trade is based. Read More
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