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The greenback’s strength receded after China posted pleasing GDP data for the first quarter. The RBA is expected to raise rates one more time before pausing as inflation remains too high. Wages in the UK rose more than expected in March leaving room for the BoE to do more at its next meeting. Investors await CPI data from Canada. Earnings reports boost optimism for stocks in the US and Europe.
AUDUSD traded +0.61% higher, trimming down a 2-day losing streak amid USD weakness. Also lifting the AUD were hawkish remarks from the RBA meeting minutes where board members agreed to another rate hike before pausing, indicating that inflation remained too high. Adding to the AUD strength was the upbeat economic growth data from China, Australia’s top trade partner, in the first quarter. Looking ahead, the US housing data will be due and building permits are expected to have dropped in March to 1.450 million from 1.550 million. The pair rallied from a psychological low at 0.6700 and may face a hurdle at 0.6750 before retesting at 0.6800.
EURGBP was flat at -0.04% as the pair struggled for direction in the European session. The UK employment data came in quite mixed with wages including bonuses rising above expectations although the same as previous at 5.9%. The number of unemployed persons, however, rose to 28 200 from an estimate of 10 200in March, taking the unemployment rate to 3.8% from 3.7%. The Euro was quite subdued against the Sterling following disappointing German ZEW economic sentiment which dropped to 4.1 in April from 13.0 the previous month. ECB Elderson’s speech will be featured in the EU economic file today. The pair were caught in a tight range between 0.8820 and 0.8833 as bulls may run for the 0.8850-0.8880 area.
CADJPY lost -0.14% as traders await Canadian inflation data. Economists expect inflation to have cooled off in March which may reinforce the BoC’s decision to pause interest rate hikes as they did at the April meeting. The CAD failed to ride on the Japanese Yen’s weakness in European trade. A positive stance on crude oil prices may limit the commodity-linked CAD`s slump. Upside traction still faces a challenge of the 101.15 high, while bears may reclaim the 100 level.
European shares are traded in a mixed manner as investors assess earnings from prominent companies. The UK100 was flat at -0.04% as it retreated from the 7900 high. CAC40 was up +0.42% with targets seen at 7600 psychological resistance on the upside. DAX surged +0.42% with a low established at 15 800. An extended leg up may give buyers 16 000.
US stock futures rise in European trade amid first-quarter earnings report. Nasdaq 100 futures were up +0.61% as it heads for 13 250 from a low at 13 060. S&P 500 futures rose +0.41% as bull’s eye 4 200 near-term resistance. DJIA futures gained +0. 43% trading above 34 000 as bulls may retest 34500.
Additionally, gold prices soared on Tuesday buoyed by broad US dollar weakness. XAUUSD gained +0.46% after bears gave up $1993.50 as bulls soared towards $2015.
