Dollar index retreated by 0.36% yesterday. Currency drop slightly as after the Japanese yen fell ahead of a closely watched Bank of Japan meeting. Scheduled to release later this week. And the last few data releases before Federal Reserve and European Central Bank interest rate decisions in early May.
The yen was pressured overall by remarks from the new Bank of Japan governor Kazuo Ueda. About the need to maintain monetary easing.
Both the Fed and the ECB will meet next week. But before that markets will digest U.S. first quarter GDP and personal consumption expenditures (PCE) data. Looking for signs of economic strain and evidence of sticky inflation for clues on the Fed’s policy path.
Gold prices were able to recover by 0.26%, and settled at 60001 compared to previous day’s close of 60548. Following the weakness in the dollar. Silver prices struggled for direction and after swinging in between gain and loss, settled at 74996, up by 0.46%.
Copper prices settled almost flat at 757.92, up 0.09%, Aluminum remained unchanged, ZINC down by 0.81% while Lead prices up by 1.15%.
Crude oil witnessed a smart recovery yesterday. Oil prices gained 1.27% as investors grew optimistic that holiday travel in China would boost fuel demand in the world’s largest oil importer.
China’s bumpy economic recovery after the COVID-19 pandemic has clouded the oil demand outlook, though Chinese customs data on Friday showed record volumes of imports in March.
Bookings in China for trips abroad during the upcoming May Day holiday point to a continued recovery in travel to Asian countries, but the numbers remain far off pre-COVID levels with long-haul airfares soaring and not enough flights available.
Economic data and events to watch
Japan
At 10.30am – BOJ Core CPI y/y, data is foreseen at 2.6% slightly lower from previous reading of 2.7%.
Above data could have a neutral impact on Yen and dollar.
U.K.
At 11.30am – Public Sector Net Borrowing. Data is expected to have expanded by 20.5B from the previous 15.9B.
At 3.30pm – CBI Industrial Order Expectations. Data is foreseen at -21 from previous -20.00.
All above data expect to have a mixed impact on Pound and Base metals
US
At 7.30 pm – CB Consumer Confidence, data is foreseen at 104.10 slightly higher from 104.20 previous.
New Home Sales. Data is foreseen at 630k lower from the previous 640k.
Richmond Manufacturing Index, data is foreseen at -8 lower from previous -5.00
All above data expect to have a negative impact on the dollar.