Published on 2019-04-22 11:24
Forex today continued to witness holiday-thinned trading, as financial markets in Australia, Hong Kong and many major European economies remain closed this Easter Monday. Amid light trading, broad-based US dollar strength was the key underlying theme, in the wake of the relative strength of the US economy, especially after a stellar US retail sales report released last Thursday.
As a result, most majors traded on the back foot while the USD/JPY pair traded in a tight range capped by the 112.00 handle, while Euro and GBP, traded modestly flat, as markets look forward to fresh economic news and Brexit-related headlines.
Amid a lack of fresh EUR macro releases, as most major European markets are out on Easter Monday holiday, the next of relevance remains the US existing home sales data due later today at 14:00 GMT. Until the release, the broader market sentiment amidst the oil rally and USD dynamics will continue to drive the forex markets.
Oil prices jumped on Monday as the United States looked set to announce that all buyers of Iranian oil must end their imports or be subject to sanctions. Both crude benchmarks rallied to fresh five-month tops after the Washington Post reported that the US will try to force the Iranian oil exports to zero. Oil markets have tightened this year because of supply cuts led by the OPEC and as a result, Brent prices have risen by more than a third since January, and WTI by more than 40 percent.
Gold is attempting a bounce today, currently trading close to $1,278 per ounce. The gains are possible to extend further, but could be short-lived, as last week's US retail sales and jobless claims have strengthened the US Dollar. Also, Gold was pushed to near its lowest level since the end of December last week as economic data from China improved enough to relax concerns over a global economic slowdown. Dampening fears of a potential global recession prompted traders to lift protective hedges in gold and put their money to work in higher-yielding assets.