Market Drivers; US Session

Dollar Drifts as Markets Await Data and Central Bank Signals

The US Dollar Index (DXY) remained subdued, fluctuating around multi-week lows below 107.00 amidst a quiet FX market. This week’s economic calendar includes the NAHB Housing Market Index, NY Empire State Manufacturing Index, and TIC Flows. Speeches from Fed officials Waller, Barr, and Daly will also be closely watched for insights into monetary policy.

EUR/USD experienced slight losses, retreating below 1.0500. The German and Eurozone ZEW Economic Sentiment indices are due, followed by a speech from ECB’s Cipollone and the ECOFIN Meeting. These events will provide clues about the Eurozone’s economic health and potential policy responses.

GBP/USD maintained its upward trend, holding above the key 1.2600 level. The UK labor market report and a speech by Bank of England Governor Bailey will be the main focus for sterling traders. These events will provide a crucial assessment of the UK economy and the central bank’s outlook.

USD/JPY continued its downtrend, reaching multi-day lows around 151.30, driven by further yen appreciation. The Bank of Japan’s Takada is the only event on the Japanese economic calendar. The yen’s strength reflects market sentiment and expectations for monetary policy.

AUD/USD reached new two-month highs around 0.6370, extending its recent rally. The Reserve Bank of Australia’s monetary policy meeting and Governor Bullock’s press conference will be key events for the Australian dollar. These events will provide guidance on the RBA’s policy stance and economic outlook.

Commodity markets saw some price adjustments. WTI oil prices rebounded modestly, influenced by the dollar’s indecision, potential ceasefire talks in the Russia-Ukraine war, and supply disruptions. Gold prices partially recovered from Friday’s sell-off, approaching the $2,900 level, supported by a lack of dollar direction and lingering US tariff concerns. Silver prices followed a similar pattern, rising to around $32.50 per ounce.