Forex Today: US Dollar strengthens further, RBA minutes and China’s GDP next
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Tuesday will be a busy day in terms of economic data in an overall light week. Early, the Reserve Bank of Australia will release the minutes of its latest meeting and then China will report Q1 growth numbers. Will the US Dollar extend its recovery?
Here is what you need to know on Tuesday, April 18:
The US Dollar Index rose for the second day in a row on Monday amid increasing odds of another rate hike from the Federal Reserve (Fed) at the May meeting and as bets for rate cuts later in 2023 diminished. Data from the US surpassed expectations, with the Empire Manufacturing Index at 10.8 in April, showing a significant improvement. On Tuesday, the US reports Housing Starts and Building Permits.
A late rally in Wall Street pushed equity indexes to positive ground. The Dow Jones gained a hundred points or 0.30%, the Nasdaq rose by 0.28% and the S&P 500 rose 0.33%. US yields jumped, posting the highest close in weeks across the curve and boosting USD/JPY, which rose to 134.50, the highest in over a month.
EUR/USD dropped for the second straight day but stayed above 1.0900. The Euro lagged on Monday, with EUR/GBP ending a four-day positive streak. The German ZEW Survey is due on Tuesday.
GBP/USD broke below 1.2400, reaching weekly lows, and settled around the 20-day Simple Moving Average (SMA) at 1.2375. On Tuesday, the UK will release employment numbers.
USD/CAD peaked at 1.3420, surpassing the 200-day SMA momentarily and then pulled back to 1.3390. In Canada, critical March Consumer Price Index (CPI) data is due on Tuesday, with a decline expected in the annualized rate from 5.2% to 4.3%.
NZD/USD found support at the 200-day SMA at 0.6156 and bounced modestly to the upside. The pair is moving with a bearish bias, but losses seem limited while above 0.6150.
AUD/USD slid further, reaching levels under 0.6700 and is back into a familiar range. The Reserve Bank of Australia (RBA) will release the minutes of its latest meeting when it decided to pause its tightening cycle.
Gold tumbled on Monday amid higher US yields and a stronger US Dollar and bottomed at $1,980, reaching a weekly low. Silver lost 1.50%, falling below $25.00. Crude oil prices shed around 2%, with WTI falling to six-day lows near $80.00.
Bitcoin suffered the worst decline in a week, falling to $29,150, the lowest level in six days. Ethereum lost 1.75% and it was trading at $2,085.
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