The Australian dollar (AUD) has strengthened after the release of higher-than-expected inflation figures for the January-March quarter, casting doubt on the possibility of interest rate cuts by the Reserve Bank of Australia (RBA) in 2024.
Results for: Economic Data
The US dollar struggled on Wednesday, extending losses incurred against the euro and sterling on Tuesday. The euro and sterling both benefited from positive economic data, while weaker US business growth and easing inflation pressures weighed on the dollar. Meanwhile, the yen remained weak despite intervention warnings from Japanese officials.
– Global financial markets rallied in 1Q24, with large-cap tech stocks leading the way.
– Strong economic data and continued momentum trading in AI-related stocks outweighed hawkish FOMC commentary on higher interest rates.
– Interest rates rose, but expectations for a recession receded.
– Large-cap stocks outperformed small-cap stocks, with the NASDAQ continuing to rally despite rising interest rates.
– Large-cap dominance was concentrated in a few companies such as Amazon, Microsoft, Meta, and Nvidia.
EUR/USD has retreated from its earlier high of 1.0695, dropping to 1.0655 as market participants digest mixed economic data. While the data doesn’t alter the European Central Bank’s (ECB) plans for a rate hike in June, it suggests they may be keeping their options open for the future.
The Nasdaq Composite closed higher yesterday due to a lack of negative news. Geopolitical fears surrounding Israel-Iran tensions subsided, potentially contributing to the positive sentiment. However, inflationary pressures remain a concern ahead of upcoming US economic data releases. The index rallied from support at 15162 and encountered resistance at 15453, where a break above or below could indicate future price direction. The Fed’s recent shift in stance indicates that inflation may continue to weigh on prices. Key economic data to watch this week include US Flash PMIs, US Q1 GDP, US Jobless Claims, and US PCE report.
USDCAD has retreated from the one-year range top, offering better risk-to-reward setups for both buyers and sellers. Buyers may target 1.3620, while sellers aim for 1.3225. On the 4-hour chart, a bearish setup has formed with a downward trendline and 21-EMA, suggesting a drop to 1.3620. The 1-hour chart aligns with the bearish outlook, with Fibonacci levels supporting the downtrend. Key economic data releases this week include US Flash PMIs, Canadian Retail Sales, US Jobless Claims, and US PCE report.
Newly appointed Bank of Japan Governor Kazuo Ueda stated that none of the recent economic data released has come as a surprise and he remains open to various policy options. His comments indicate a wait-and-see approach, leaving analysts uncertain about potential shifts in monetary policy.
Asian markets are expected to extend gains on Tuesday after a positive start to the week, supported by a rebound in tech shares, calm in bond markets, and cooling geopolitical tensions. Economic data releases for Japan, Australia, India, Singapore, Hong Kong, South Korea, and Taiwan will be closely watched. Currency traders remain cautious about possible yen intervention, while China’s yuan continues to weaken. Investors await earnings results from tech giants this week for guidance on the outlook for global stocks.
It’s a lower-tier data day only in Asia today, according to the ForexLive economic data calendar.
Gold and silver prices experienced a significant decline on Monday due to easing geopolitical tensions and anticipation of key economic data releases this week. Gold dropped by 2.7%, while silver fell by 5.1% on Monday afternoon EST. The declines mark the steepest drops for both precious metals since last year.