The USD Index (DXY) took a hit last week, falling to three-week lows below the 105.00 support level. This was largely due to the dovish tone at the FOMC event and weaker-than-expected Nonfarm Payrolls in April. The US Dollar ended the week in the red, driven by lower US yields and speculation of a potential interest rate cut by the Fed in September. Looking ahead, economic indicators such as the RCM/TIPP Economic Optimism Index and Consumer Credit Change are scheduled for release on May 7, followed by MBA’s Mortgage Applications and Wholesale Inventories on May 8, and Initial Jobless Claims on May 9. Closing the week, the focus will be on the preliminary Michigan Consumer Sentiment and Monthly Budget Statement.
Meanwhile, EUR/USD saw gains for the third consecutive week, benefitting from the weaker Greenback and positive sentiment in the risk-associated markets. Key data releases for the euro include the final HCOB Services PMI for Germany and the euro area on May 6, Retail Sales on May 7, and the ECB’s Accounts on May 10. GBP/USD also continued its upward trend, surpassing the 1.2600 level, with upcoming releases including the BRC Retail Sales Monitor and S&P Global Construction PMI on May 7, the BoE meeting on May 9, and GDP figures, Trade Balance, Industrial and Manufacturing Production, and the NIESR Monthly GDP Tracker at the end of the week.
USD/JPY saw a sharp reversal after four consecutive weekly gains, dropping below 152.00 amid suspected FX intervention by the Japanese Ministry of Finance. Upcoming data for Japan includes weekly Foreign Bond Investment figures on May 6, BoJ Summary of Opinions, Foreign Bond Investment, and the flash Coincident Index and Leading Economic Index on May 9, and Household Spending, Bank Lending, and the Eco Watchers Survey on May 10. On the other hand, AUD/USD saw gains for the second week in a row, nearing three-month highs, with the RBA meeting on May 7 being a key event for Australia.
Looking ahead, there are several notable speeches and central bank meetings that could shape monetary policies. Fed speakers including Goolsbee, Williams, and Cook are scheduled to speak on May 4, followed by Williams and Barkin on May 6 alongside ECB’s Nagel and SNB Jordan. On May 7, Fed’s Kashkari and ECB’s Nagel are set to speak, with Cook speaking on May 8, and BoE’s Bailey and Pill on May 9. Finally, BoE’s Pill will speak on May 10. The BoE meeting on May 9 is expected to leave the policy rate unchanged, impacting the market sentiment and currency movements.
