Market Drivers; US Session, April 30

Mohamed Abdelhamid 1 May, 2024 5:09 am Commodities, Forex Market, Market Update

In the face of ongoing caution, the US dollar appreciated sharply ahead of Wednesday’s FOMC meeting. Weekly mortgage applications are due in the first turn on May 1.

This is followed by the ISM Manufacturing PMI, the final S&P Global Manufacturing PMI, the ADP Employment Change, and construction spending. Ultimately, Chair Powell’s news conference can’t happen until after the FOMC interest rate decision.

After a rough start to the week, the US dollar gained momentum and helped the USD Index (DXY) surpass the 106.00 barrier, helped by cautious trading ahead of the Fed’s interest rate decision on Wednesday and data.

Key Developments:

EUR/USD came under strong downside pressure and retreated to multi-day lows near 1.0670. The euro calendar will be closed on May 1.

GBP/USD saw its recent upside trimmed and revisited lows near the 1.2500 region on the back of the stronger Dollar. Across the Channel, Nationwide Housing Prices are expected on May 1 prior to the final S&P Global Manufacturing PMI.

USD/JPY regained buying interest and rapidly surpassed the 157.00 hurdle, as traders seem to have already left behind Monday’s suspected FX intervention. There are no scheduled data releases in the Japanese docket on May 1.

AUD/USD collapsed to multi-day lows south of 0.6500 the figure in response to the pick-up in the Dollar and the generalized weakness in the commodity complex. In Oz, the Ai Group Industry Index and the final Judo Bank Manufacturing PMI are due on May 1.

Commodities:

WTI prices continued their recent downward trend and dropped below the $81.00 barrier amid the strong dollar and expectations of a tighter Fed for an extended period of time.

Gold prices declined for the second day in a row, revisiting the $2,290 per troy ounce area, driven by higher US rates and the strong rebound in the US dollar. In a similar vein, silver fell about 3% and touched the low $26.00s again for the first time since early April.

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