The US Dollar commenced the new trading week facing continued downward pressure, prolonging its recent decline as selling interest persisted. Market participants are now keenly awaiting a series of crucial monetary policy decisions from major central banks in the coming days, with the Federal Reserve taking center stage.
Key Developments for Tuesday, May 6:
The US Dollar Index (DXY) demonstrated resilience, recovering from intraday lows to conclude Monday’s trading session with modest losses, hovering near the critical 100.00 level. Today’s economic calendar will feature the release of the final Balance of Trade figures, followed by the American Petroleum Institute’s (API) weekly report on US crude oil inventories. Market analysts will be scrutinizing these figures for insights into the health of the US economy and potential implications for future monetary policy. The trade balance data, in particular, will provide a snapshot of the nation’s import and export activity, while the API data will offer an early indication of changes in US oil stockpiles.
The EUR/USD pair initially experienced bullish momentum but subsequently retraced, posting marginal gains around the 1.1300 level on Monday. Today’s economic releases from Europe include the final HCOB Services Purchasing Managers’ Indices (PMIs) for Germany and the broader Eurozone, alongside the release of Producer Price Index (PPI) data for the region. These figures will be closely watched for indications of economic activity and inflationary pressures within the Eurozone. A stronger-than-expected PMI reading could signal robust growth in the services sector, while higher PPI figures may suggest rising inflationary pressures, potentially influencing the European Central Bank’s (ECB) future policy decisions. Investors are also closely monitoring geopolitical developments and their potential impact on the Eurozone economy.
