A resurgence of buying activity propelled the US Dollar to extend its gains from Tuesday, primarily fueled by easing anxieties surrounding US-China trade relations and investors’ interpretation of recent US economic data releases that fell short of expectations. It is important to note that most financial markets will be closed on May 1st in observance of the Labour Day holiday.
Here is what you need to know on Thursday, May 1:
The US Dollar Index (DXY) continued its upward trajectory, reaching a two-day peak within the 99.60-99.70 range. This movement occurred amidst fluctuating Treasury yields and in the wake of disappointing US economic data. Investors are keenly awaiting the release of the standard weekly Initial Jobless Claims figures, followed by the Challenger Job Cuts report. Furthermore, the final S&P Global Manufacturing PMI is scheduled for release, alongside the ISM Manufacturing Index and data on Construction Spending. These indicators will provide further insight into the current state of the US economy, particularly the manufacturing and labor sectors. Market participants will be closely analyzing these figures for clues about the Federal Reserve’s future monetary policy decisions. Recent inflation data has also played a key role in shaping market expectations, with investors carefully monitoring price pressures for any signs of acceleration or deceleration.
The EUR/USD pair extended its weekly decline, retesting the 1.1300 level, reacting to the Dollar’s strengthened position. The economic calendar for the Eurozone includes the release of the final HCOB Manufacturing PMI figures for both Germany and the broader Eurozone. These PMI readings are crucial for gauging the health of the manufacturing sector, a key driver of economic growth in the region. Additionally, the preliminary Inflation Rate and the Unemployment Rate for the Eurozone are scheduled for release. These data points will be closely scrutinized by the European Central Bank (ECB) as it assesses the need for further monetary policy adjustments. Persistent inflationary pressures could prompt the ECB to consider additional interest rate hikes, while a weakening labor market might argue for a more cautious approach. The interplay between these economic indicators will significantly influence the EUR/USD exchange rate in the near term. Analysts are also considering the potential impact of geopolitical risks and global economic uncertainty on the Eurozone’s economic outlook.
