Muted Major FX Action Masks Big Moves in Asia; Gold Rebound Gather Momentum
| Action Insight Mid-Day Report 5-5-25 |
Muted Major FX Action Masks Big Moves in Asia; Gold Rebound Gather Momentum |
The currency markets remain subdued in early trading this week, with the exception of a broad, mild Dollar weakness. Among the major currencies, movements have been muted despite notable developments. Swiss inflation falling back to 0% has increased pressure on the SNB to cut rates further to avoid deflation, but the Swiss Franc showed little response. Similarly, an unexpected improvement in Eurozone investor confidence failed to generate any sustained lift in the Euro. In equities, European stocks were mixed, lacking clear conviction, while UK markets closed for a public holiday. US futures also point to a slightly weaker open. Meanwhile, oil prices saw some stabilization but remained lower for the day after OPEC+ agreed to a production hike over the weekend. WTI crude is attempting to recover, but the bearish bias remains as markets now anticipate a potential production surplus in the second half of the year. The most eye-catching action is unfolding in Asian currency markets. Taiwanese Dollar soared more than 5% to a three-year high against Dollar, capping an 8% gain in just two sessions. The sharp move followed the conclusion of US-Taiwan trade talks last week, stoking speculation that a tacit agreement to strengthen the TWD may have been reached. While it's denied by Taiwan’s central bank, the pace and scale of the rally suggest market confidence in a policy-backed shift, which would align with US interests in reducing bilateral trade imbalances.... |
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.1257; (P) 1.1319; (R1) 1.1364; More... EUR/USD is staying in tight range above 1.1265 and intraday bias remains neutral. On the downside, below 1.1265 will resume the corrective fall from 1.1572 short term top. But downside should be contained by 38.2% retracement of 1.0176 to 1.1572 at 1.1039. On the upside, break of 1.1424 will suggest that the correction has completed and bring retest of 1.1572 high. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 01:00 | AUD | TD-MI Inflation Gauge M/M Apr | 0.60% | 0.70% | | 06:30 | CHF | CPI M/M Apr | 0.00% | 0.20% | 0.00% | | 06:30 | CHF | CPI Y/Y Apr | 0.00% | 0.30% | | 08:30 | EUR | Eurozone Sentix Investor Confidence May | -8.1 | -14.9 | -19.5 | | 13:45 | USD | Services PMI Apr F | 51.4 | 51.4 | | 14:00 | USD | ISM Services PMI Apr | 50.6 | 50.8 |
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