Forex Report: USD Moves to Recent Highs


Today, during the Asian session, the EUR/USD pair is stable and is trading near recent highs of early May, renewed yesterday. On Monday, EUR was growing steadily, as investors got rid of long USD positions amid the development of a new crisis in Washington and Beijing relations. They began to escalate after US President Donald Trump repeatedly accused China of hiding information about the threat of coronavirus. Last weekend, White House adviser Peter Navarro sharply criticized the PRC and reproached the government for not restricting the movement of its citizens outside the country in time, which contributed to the rapid spread of the epidemic in the world. On Tuesday, European investors are focused on the publication of data from the ZEW Research Institute on business sentiment in Germany and the EU, as well as on the meeting of the Council of Ministers of Finance and the EU Economy.


Today, during the Asian session, the GBP/USD pair is growing within the correction, retreating from the lows of March 26, renewed against the backdrop of a steady decline in the instrument throughout the past week. Yesterday’s positive dynamics was due to technical factors of the correction of the American currency, while the pound remained under pressure against the backdrop of deterioration in the prospects for the British economy. Investors sharply negatively reacted to the statement of the Bank of England representative Andrew Haldane, who noted that the regulator is considering the idea of ​​introducing negative interest rates. Earlier, the head of the Central Bank, Mark Carney, officially rejected such an idea. On Tuesday, investors expect the publication of March information on the dynamics of the UK labor market over the past 3 months.


Today, during the Asian session, the AUD/USD pair shows ambiguous dynamics, trading near the opening level at 0.6523. The instrument keeps a “bullish” momentum generated yesterday due to the strengthening of correctional sentiment in the US currency but there are no new growth drivers yet. The published protocol of the RBA meeting did not help clarify the situation on the market, and investors fear the most decisive actions from all the world’s leading regulators. However, optimism is present on the market due to the gradual abolition of restrictive measures that give hope for the restoration of industrial activity in all regions. In China, despite the aggravation of trade relations with the USA, industrial activity is growing, which leads to the growth of the import of the raw materials.


Today, during the Asian session, the USD/JPY pair is growing moderately, keeping the flat nature of trading in the short term. Despite the rather poor position of the US currency, investors are actively selling the yen amid the publication of disappointing macroeconomic data from Japan, which indicates the plunge of the economy into recession for the first time since 2015. According to today’s publications, industrial production in March fell by 3.7% MoM and 5.2% YoY, which coincided with market expectations. The percentage of capacity utilization for the same period fell by 3.6%, while analysts expected a slighter decrease, by 0.2%.


Today, during the Asian session, gold prices are rising moderately, consolidating after a sharp decline yesterday, which replaced the increase, due to which gold has renewed its record highs since October 2012. The instrument is still supported by rumors about possible negative interest rates by the Fed. However, while the American regulator does not confirm this information and officially considers such measures less effective than what it currently has. US housing market data for April will be released on Tuesday. Also, during the day, the head of the US Federal Reserve Jerome Powell will speak in Congress.

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