In the aftermath of the Federal Reserve’s decision to leave interest rates unchanged, the US dollar lost ground on Thursday, May 2. The decline in US yields contributed to the weakening of the greenback. The USD Index (DXY) fell below the key support level of 106.00, with the focus shifting to economic indicators such as weekly Initial Jobless Claims, Balance of Trade results, and Factory Orders.
EUR/USD saw a reversal of Tuesday’s pullback, climbing back above 1.0700 as the dollar tumbled after the FOMC meeting. Data releases such as the final HCOB Manufacturing PMI in Germany and the euro area will be closely watched on May 2. In the UK, there are no major data releases scheduled for the day.
GBP/USD managed to break above the 1.2500 level following the US Dollar’s decline after the Fed’s decision to keep rates unchanged. Meanwhile, USD/JPY trimmed its gains from Tuesday as the greenback came under pressure and US yields decreased. The Bank of Japan will release its Minutes on May 2, along with other economic indicators.
AUD/USD staged a strong comeback, surpassing the 0.6500 level after the US Dollar weakened. In Australia, the focus will be on Balance of Trade and preliminary Building Permits data on May 2. WTI prices remained under pressure, dropping below $79.00 per barrel, while Gold prices rose above $2,300 per troy ounce as the Dollar weakened and yields declined. Silver prices also saw some upside momentum after a recent decline.
Overall, the market sentiment on May 2 was influenced by the Federal Reserve’s decision to leave interest rates unchanged and comments from Chair Jerome Powell ruling out a rate hike as the Fed’s next move. The dollar lost ground across the board, with the USD Index falling below key support levels. Economic indicators in Europe and Japan, as well as data releases in the UK and Australia, were closely watched by investors. Oil prices remained under pressure, while precious metals such as Gold and Silver saw gains as the Dollar weakened and yields decreased.
