The DXY fell to a two-week low, testing the critical 100.00 support level as selling pressure intensified following Moody’s credit rating downgrade. Market participants will closely watch the weekly US crude inventory report from API and speeches by Federal Reserve officials Markin, Bostic, Collins, Musalem, and Kugler for further clues on monetary policy direction.
EUR/USD
The euro surged to a two-week high above 1.1200, benefiting from the US Dollar’s decline. Upcoming German Producer Price data, alongside EMU’s Current Account, Construction Output, Labour Cost Index, and the European Commission’s flash Consumer Confidence report, will provide additional insight into the Eurozone’s economic health. ECB officials Donnery, Cipollone, and Buch are also scheduled to speak.
GBP/USD
The British pound climbed to a three-week peak, breaking above 1.3400 amid broad US Dollar weakness. Market focus will shift to the UK’s Inflation Rate release on May 21, which could influence the Bank of England’s policy outlook.
USD/JPY
The pair traded lower on Monday, approaching support near 144.60. Japan’s Balance of Trade figures, due on May 21, will be closely monitored for indications of economic momentum.
AUD/USD
After three days of declines, the Australian dollar rebounded, reclaiming the 0.6400 level and nearing its 200-day simple moving average. The Reserve Bank of Australia is expected to cut the official cash rate by 25 basis points, a key event for the currency’s near-term direction.
Commodities
WTI crude oil fluctuated around $62.00 per barrel, influenced by the US credit downgrade and concerns about China’s economic outlook. Gold prices gained momentum, retesting the $3,250 per troy ounce level, supported by US Dollar weakness. Silver edged lower, pressured by disappointing Chinese economic data.
Summary
The market remains sensitive to credit rating developments and geopolitical tensions, with central bank actions and economic data releases set to guide currency and commodity movements in the near term.
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