Following Monday’s decline in the American session, the US Dollar (USD) attempts to regain its footing early on Tuesday, as the US Dollar Index recovers from its 10-day low of 101.20 set in the early Asian session. The housing Price Index for February, New Home Sales for March, and the April Consumer Confidence Index from the Conference Board will be featured on the US economic agenda later in the day.
US Consumer Confidence Forecast: Indications of recession are likely to keep the USD under pressure.
Monday’s USD performance was negatively affected by the steep decline in US Treasury bond yields. The yield on the benchmark 10-year US Treasury bond fell below 3.5 percent for the first time since April 14. Early on Tuesday, the 10-year yield is struggling to stage a recovery. In the meantime, Wall Street’s key indices closed with varied results, with the Nasdaq Composite registering modest losses and the Dow Jones Industrial Average gaining 0.2%. Futures on US stock indexes are trading in the red during the European morning.
On Monday, the EUR/USD capitalized on the USD’s renewed weakness and recorded significant gains. The duo appears to have entered a consolidation phase near 1.1050 on Tuesday morning. Since there will be no major data releases from the Eurozone, the pair’s movement may be determined by the USD’s value and remarks from European Central Bank (ECB) policymakers.
The GBP/USD pair closed in positive territory on Monday and continued to advance during Tuesday’s Asian trading hours. However, after encountering resistance at 1.2500, the pair lost momentum and was last seen trading modestly lower at around 1.2470.
Monday’s USD/JPY close was slightly above 134.00, and Tuesday’s trading range remains narrow. Earlier in the day, Bank of Japan (BoJ) Governor Kazuo Ueda stated, “We view the risk of inflation undershooting forecast as greater than the risk of overshooting.” Consequently, the Bank of Japan (BoJ) must maintain its loose monetary policy.
On Monday, the gold price benefited from declining US yields and gained bullish momentum. On Tuesday, XAU/USD continues to climb toward the key $2,000 level.
As a result of Monday’s indecision, Bitcoin trades marginally lower on Tuesday morning and was last seen trading below $27,500. Ethereum dropped 1% on Monday and another 1% on Tuesday, trading just above $1,800.