Market Drivers; US Session, May 14

Ahead of the release of US CPI on Wednesday, market players were analysing sticky US producer prices and Chair Powell’s lukewarm stance, which caused the US dollar to continue its dismal start to the week and retreat to multi-day lows.

The USD Index (DXY) continued to fall on Monday, breaking below the 105.00 mark in the face of additional weakening in US rates. May 15th is National Housing Market Index Day, with Retail Sales, Business Inventories, NAHB Housing Market Index, weekly MBA Mortgage Applications, and TIC Flows taking second and third place, respectively. Fed representatives Kashkari and Bowman are also scheduled to speak.

EUR/USD maintained its bullish bias and advanced to five-week highs past the 1.0800 barrier. Another estimate of the EMU Q1 GDP Growth Rate is expected on May 15 along Industrial Production in the broader euro area.

GBP/USD rose further north of the key 200-day SMA, approaching at the same time the 1.2600 hurdle. The next release of note in the UK calendar will be the BoE’s Financial Stability Report on May 16.

USD/JPY printed its sixth day of gains out of the last seven, this time surpassing the 156.00 barrier to clinch new two-week peaks. Next on tap on the Japanese docket will be the preliminary Q1 GDP Growth Rate, final Industrial Production readings and Foreign Bond Investment on May 16.

AUD/USD kept its consolidative mood in place in the upper end of the range, always below the May peak around 0.6650. In Australia, the Wage Price Index is due on May 15.

Commodities

Prices of WTI faded Monday’s advance and refocused on the downside on the back of the unchanged OPEC monthly report and the upside surprise in US producer prices.

Prices of Gold resumed their upward bias and flirted with the $2,360 zone per troy ounce in response to the weaker dollar and lower US yields. It cousin Silver added to Monday’s uptick and flirted with monthly highs around $28.75 per ounce.

Also Read:
GBP/USD consolidates ahead of CPI data

CPI Preview: How Will US Inflation Data Influence Major Currencies?

Dow declines following US PPI data

Gold surges amid stronger safe haven appeal

EUR/USD rises as Powell emphasizes higher for longer rate policy

Powell: PPI reading was quite mixed