US Dollar Remains Steady after Climbing 0.7% on Friday
On Monday, Asian markets retreated, while US equity futures advanced. After rising on Friday, the US dollar remained strong. Investors contemplated the improving economic situation around the globe and inflation risks. Asian markets lacked trading volume and moved lower, with Hong Kong leading losses. Some Asian markets were shut for holidays. After the S&P 500 abandoned a record high reached on Friday, European futures inched up. The US gauge put a lid on its biggest monthly gains since November 2020.
In Australia, 10-year government bond yield crawled up, after the Treasury benchmark stabilized above 1.6%. Crude oil slipped, brought down by the coronavirus outbreak in India. The yen sank, whereas gold edged higher.
Investors are worried about inflation. The latest US data show that fiscal stimulus helped drive the largest monthly gains in personal incomes. The Federal Reserve’s preferred gauge of prices climbed by the most since 2018. These data bring the thought that central banks will soon take away support by trimming asset purchases. In response to investors’ worries, top US financial officials try to assure them that inflation risks are minimal. Treasury Secretary Janet Yellen said that the demand boost from Biden’s economic plan would be spread over the decade.
Economic data in Asia gladdened. Gauges of activity in Taiwan and South Korea pointed to economic revival. Exports in South Korea climbed last month the most in 10 years, signaling that the country is healing from the pandemic.
These are the main moves in markets that investors should watch on Monday:
S&P 500 futures advanced 0.2% during the Asian session, after the Index slid 0.7% on Friday. The S&P/ASX 200 in Australia remained unchanged. Kospi in South Korea retreated 0.8%. Hang Seng in Hong Kong slipped 1.5%. Euro Stoxx 50 futures added 0.1%. The FTSE in London inched higher 0.1%. The DAX in Germany rose 0.3%. French’s CAC was 0.2% up.
The euro traded at $1.2022. The yen gave up 0.3% to trade at 109.63 per dollar. The offshore yuan traded at 6.4798 per dollar. The dollar index soared 0.7% on Friday and added 0.1% on Monday. The GBP/USD pair added 0.22% to 1.3853. AUD/USD changed hands at 0.7724, with the Australian dollar inching 0.1% up. USD/CAD was up 0.2% to 1.2312.
West Texas Intermediate crude dwindled 0.6% to %63.20 a barrel. Brent Crude was little changed at $66.75. Gold added 0.3% to trade at $1,774.25 per ounce. Silver advanced 1.3% to $25.21 per ounce. Platinum shed 0.1% to $1,201.15 an ounce. Copper arrested its upward movement and gave up 0.06% to $446.55.
Treasury futures remained unchanged after the 10-year yield held around 1.63% on Friday.
Australia’s 10-year bond yield was little changed at 1.76%.
Traders should watch the following events this week:
- Fed Chair Jerome Powell speaks in an event hosted by the National Community Reinvestment Coalition.
- The Reserve Bank of Australia monetary policy decision is due on Tuesday.
- The Treasury announces its quarterly refunding on Wednesday.
- Chicago Fed President Charles Evans gives a virtual speech on the U.S. economy at an event hosted by Bard College. Cleveland Fed’s Loretta Mester speaks to the Boston Economic Club on Wednesday.
- The Bank of England rate decision is due on Thursday.
- The US April employment report is released on Friday.
Have a profitable trading day today!