Upbeat Mood Continues as USD Forex Market Trades Sideways
- USD Moves Little Despite PMI Beat
- Euro Holding Strength as Reopening Continues
- Wall Street Moves Higher Again
The week in the forex market has started with little movement in any direction for the US Dollar that still appears itself in a jam between heightening inflation numbers as shown by key guiding numbers like the CPE last week, and CPI numbers this week which came in strong, and an ever-improving economy that is also being more productive. The result has been a lack of clear direction and this has been taken advantage of by a strengthening Euro with impressive numbers also coming in from the region. Wall Street also picked up the positivity of last week on the first trading day of the week and month.
Improving PMI Contributes Little to USD Strength
The Dollar has remained weak into the new trading month even as the economy shows very clear signs of improvement and positive numbers reflect the same in many sectors. The US ISM Manufacturing PMI has come in ahead of what analysts had expected with the 61.2 number showing a clear improvement in the sector and being a step ahead of the 60.7 expectation that had been set.
This has not been reflected in the Dollar value to forex traders though. The USD Index, a key measure of the currency against a basket of other major currencies in the world remains weak below the key benchmark of 90 points. A key factor at play here is lingering inflation concerns that continue to be felt. This has also been illustrated by the CPI data today that came in hotter than expected at 2% for May.
Euro Stays Where Others Fade
A continually weak Dollar presents an opportunity for other major currencies to exploit. This has been an opportunity missed by the GBP as they continue to battle with several domestic issues. Meanwhile, however, the Euro has continued to garner support according to forex brokers. This is reflected as the currency now tops 1.225 against the Dollar.
This strength is thanks in large part to PMI data beats of their own in the EU. The numbers in the key German economy for May were revised upwards to 64.4 while the final EU number was similarly revised upward to 63.1, both beating earlier expectations and boosting the currency in the process.
Markets Continue to Ride Wave Higher
Markets on Wall Street continue to reflect a bullish economic outlook even as treasury yields edged upward. The Dow Jones popped a further 150 points at the opening bell with the S&P 500 also closing in on an all-time high.
Not only records for equities are being seen. The price of gold is now pushing higher above $1900 while oil prices have rallied to a two-year high on news that the OPEC+ group has agreed to move toward an easing of production cuts with more than 2 million barrels a day to be brought back into the market for the key summer months.