Market Drivers – US Session 18/04/2023

On a quiet Tuesday in the US session across financial markets, the US dollar fell. The Dollar Index declined again below 102.00, but it is still a long way from its recent low. US yields barely changed and remained close to recent monthly highs.

Economic Data

In the first quarter, China’s GDP grew by 4.5% YoY, above estimates. It displays the recovery following the repeal of the zero-Covid policy. Retail sales increased 10.6% in March. The figures slightly improved market sentiment. As investors process Q1 profits, Wall Street ended with mixed results.

Key Developments

While EUR/GBP bottomed out at 0.8808 (a three-day low), GBP/USD climbed from the 20-day Simple Moving Average back above 1.2400. EUR/GBP subsequently bounced above 0.8830. In the three months that ended in February in the UK, the unemployment rate increased to 3.8%, while pay growth was 5.9% from a year earlier. The UK is anticipated to see significant consumer inflation on Wednesday, with the headline Consumer Price Index forecast to be 9.8% YoY.

The Canadian dollar lagged after Canadian inflation statistics as USD/CAD ended level at 1.3390. Due to hawkish Reserve Bank of Australia (RBA) minutes, the AUD/USD exchange rate reached a high of 0.6740 before losing steam. NZD/USD bounced back to the 0.6200 area from its weekly lows.

While moving over 1.0950, the EUR/USD rate is still restricted below 1.1000. The upward trend continues. The Federal Reserve (Fed) will release the Beige Book and the Final March Consumer Price Index on Wednesday. On Tuesday, mixed US housing figures were reported.

Silver regained $25.00 and gold reclaimed $2,000 thanks to a falling US dollar. A mixed day was also enjoyed by cryptocurrencies. Bitcoin’s price has held steady at $30,000. WTI crude oil prices were barely below $81.00, remaining unchanged.

The Westpac-Melbourne Institute Leading Index of Economic Activity will be released by the Melbourne Institute, and Japan will announce Industrial Production. These figures shouldn’t warrant much action. On Tuesday, there were no significant market movements, and the US dollar lost half of its previous gains.

Also Read:

GBP/USD awaits UK CPI to ascertain BoE’s hawkish bias

USD/CHF’s rally stalls at 0.8900

EUR/USD advances on US dollar’s weakness

What can Bitcoin’s latest price action tell about crypto market?

Macklem: BoC considered need for rates to stay higher longer

Ahead of API, WTI slides to multi-day lows near $80.00