US dollarThe market mood remains optimistic despite a stark warning from Jerome Powell, Chairman of the Federal Reserve, who warned that a full recovery may have to wait for a vaccine. Stocks and oil are on the rise and the US dollar is on the back foot.
The dollar was down as the threat of a second wave of coronavirus infections rattled investors as did a slew of bleak U.S. economic data. GBP/USD keeps above 1.2100 to start the EU session but pound still faces major headwinds. EUR/USD is currently trading at 1.0823, representing 0.10% gains on the day, having put in a low of 1.0807 during the Asian trading hours. USD/JPY takes the bids near 107.20 after Japan’s Q1 GDP release on Monday.
Traders are finding some room for optimism after a rough week with US futures trading higher and helping to inject some cautious gains into Asian stocks as well. S&P 500 futures are now up by over 1%, retracing some of the losses from last week.
Oil prices climbed by more than $1 a barrel on Monday, supported by output cuts and signs of gradual demand recovery amid easing coronavirus curbs, with U.S. oil showing no signs of last month’s contract expiry price rout.
Gold was up on Monday morning, continuing its gains from Friday to touch its highest point since October 2012. A souring U.S.-China relationship, as well as other bleak news, led investors to turn to the safe-haven yellow metal. Also, remarks by Fed chair Powell helped to keep gold on the path on its major breakout.
Looking ahead, it’s still all about market sentiment and any incoming trade-related headlines for the most part amid an absence of any major market-moving economic releases from the Eurozone and the US.