USD struggling to find traction after Friday’s rebound
Monday 3 April, 2023
Daily Currency UpdateThe USD began the week on an optimistic note with the US dollar index (DXY) briefly surpassing the 103.00 barrier during the Asian trading hours. The market is reassessing the US Federal Reserve’s rate prospect amid revived concerns over energy inflation turning anxiously high. The Institute of Supply Chain Management (ISM) will release its manufacturing Purchasing Manager’s Index (PMI) today. The results of this data could affect the USD valuation today. Ahead of this data, the DXY has lost its footing and began decreasing following an unsuccessful bull run above 103. The index is now trading below 102.50.
Key MoversThe EUR/USD pair was seen above the 1.0875 region in an unstable position to start the week. Regardless of the moderate retreat to start the week, the EUR/USD remains bullish in the near term.
GBP/USD leaps nicely from the 1.2275 area and is currently trading above the 1.2400 region. Ahead of the PMI data from the US, the positive risk mood appears to be boosting the pair. The pound sterling continues to increase against the USD for the third straight week.
Today in Canada, The S&P Global Canada Manufacturing PMI data was recorded at 48.6, down remarkably from 52.4 in February and below the market expectation of 51.7. The USD/CAD pair stays under bearish pressure despite this disappointing data and was last seen losing 0.5% on the day at 1.3452.
The economic calendar today starts with the release of the US manufacturing ISM, followed by the S&P Global Canadian PMI. More important data is due later this week such as US services ISM, the Automatic Data Processing Inc. (ADP) job report on Wednesday, and the payrolls report on Friday.
The Organization of the Petroleum Exporting Countries (OPEC) decision to cut production has resulted in the price of the Brent blend of crude oil undoing most of last month’s losses and bringing this light crude oil back in line with the three-month average. Following its meeting on Monday, OPEC stated that the additional oil production cuts will amount to 1.66 million barrels per day, as reported by Reuter. The immediate market reaction seems to be boosting oil prices. Currently, West Texas Intermediate (WTI) was up nearly 6% on the day at $80.10 per barrel. Likewise, a barrel of Brent oil was last seen trading at $84.40, rising 5.9%.
- EUR/USD: 1.0792 - 1.0897 ▲
- GBP/USD: 1.2277 - 1.2406 ▲
- AUD/USD: 0.6654 - 0.6774 ▲
- USD/CAD: 1.3437 - 1.3534 ▼