US dollarThe dollar and yen are keeping weaker to start the day amid a more positive start for risk in the early European trading. It is still all about risk flows now and dollar pairs are holding out at some key points.
The dollar edged lower against the euro as the common currency added to Monday’s gains following news of a Franco-German proposal for a fund that would offer grants to European Union regions and sectors hit hardest by the coronavirus pandemic.
Against the Japanese yen, dollar rose 0.38% to 107.74 yen as reports that the US drug maker Moderna had provided insufficient data to determine the vaccine’s efficacy. This led to some weakness in the US equity markets and in turn, forced investors to take refuge in the dollar.
The pound is slightly easing against the dollar, after the UK CPI data with GBP/USD pair falling around to 1.2240 levels.
The S&P 500 closed lower amid the report questioning Moderna’s recent coronavirus vaccine early-stage trial results, wiping out modest gains on the benchmark index in the last hour of trading. The Dow Jones Industrial Average fell 1.56% to 24,213.76, the S&P 500 was down 1.05% at 2,922.94, and the Nasdaq Composite lost 0.54% to 9,185.10.
Treasury yields fell as Federal Reserve Chair Jerome Powell shed no new light on the government’s economic response to the coronavirus pandemic and the market looked ahead to the return of the 20-year bond.
U.S. crude ended slightly higher, as U.S. Treasury Secretary Steven Mnuchin said he supported extending certain measures intended to bolster the economy, while Brent ended lower on concerns that output cuts might not be enough. Another drawdown in U.S. crude stockpiles in official weekly data to be released on today could support prices more.
Gold rose amid uncertainty over how economies would emerge from a deep slowdown, while doubts over a potential vaccine for the novel coronavirus aided bullion’s advance. Spot gold rose 0.82% to $1,749 per ounce.
Looking forward, market participants now focus to the Eurozone economic docket with Eurozone’s April final CPI figures and the preliminary estimate for the Consumer Confidence for May coming at 09:00 GMT and 14:00 GMT respectively.
Later during the US trading session, the Minutes of the latest FOMC meeting will play a key role in influencing the USD price dynamics coming at 18:00 GMT. Prior to the Minutes, EIA Crude Oil stockpiles report is released at 14:30 GMT.