FX Update – May 1 – Mixed USD

<h3>AUDUSD, H1</h3>
<p>The commodity currencies have come under pressure after US President Trump soured the mood in equity markets, raising his accusations against China about the coronavirus outbreak, threatening new tariffs while, according to an unnamed source connected to the White House cited by <strong><em>Bloomberg</em></strong>, considering blocking a government fund — the Thrift Savings Plan (which is the federal government’s retirement savings fund — from investing in Chinese equities. Sources cited by <strong><em>Reuters</em></strong> said that a range of options against China were being discussed, but considerations were at an early stage.</p>
<p>The <span><strong>S&amp;P 500</strong></span> closed on Wall Street yesterday with a 0.9% decline, which capped out the best month the index has seen since 1987 as shares rebounded from the deep declines that were seen in March. Trading in S&amp;P 500 futures has seen losses accelerate, racking up declines of over 2% so far in the overnight session. Trading conditions have been thinned by the absence of Singapore, China and Hong Kong, which are closed today for Labour Day holidays, and with many European countries also taking the day off. Final PMI survey data out of Japan and Australia reaffirmed the dismal economic picture due to the lockdowns.</p>
<p>The biggest mover out of the main currencies has been the <span><strong>Australian dollar</strong></span>, which dropped nearly 1% in posting a three-day low at 0.6446 against the US dollar. The <strong><span>Kiw</span></strong>i <strong>dollar</strong> also came under pressure, while <span><strong>USDCAD</strong></span> lifted by over 0.6% in printing a three-day high at 1.4027, despite oil prices rising to a two-week high.</p>
<p>Elsewhere, <strong><span>EURUSD</span></strong> has been rooting in the mid 1.09s, holding below yesterday’s 16-day at 1.0937. <span><strong>USDJPY</strong></span> has been holding a narrow range in the lower 107.0s. <span><strong>Sterling</strong></span> has come under pressure, giving back gains seen yesterday. The UK currency has been correlating with global equity market direction, similar to a commodity currency, over the last couple of months. The Swiss franc also remains in demand with <strong><span>USDCHF</span></strong> moving down to 0.9630 from 0.9750 yesterday.</p>
<p><strong>Click </strong><a href="https://www.hotforex.com/en/trading-tools/economic-calendar.html"><strong>here</strong></a><strong> to access the HotForex Economic Calendar</strong></p>
<p><strong>Stuart Cowell</strong></p>
<p><strong>Head Market Analyst</strong></p>
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