Review of the dollar, euro, pound, yen, aussie and gold prices for May 7, 2021


The European currency shows mixed trading dynamics against the US dollar during today’s Asian session, consolidating after a rather strong growth the day before, which allowed the single currency to regain some of the losses it suffered in the middle of the week. Strong support for the instrument on Thursday was provided by strong macroeconomic statistics from Europe, while market participants are positive about the prospects for further lifting of quarantine restrictions in the region. The volume of retail sales in the euro area in March increased by 2.7% mom after rising by 4.2% mom in February against the expected + 1.5% mom. On an annualized basis, sales volumes added 12% YoY after declining 1.5% YoY in February. Market forecasts assumed growth of the indicator by 9.6% y / y. The focus of investors today is data from Germany on the volume of imports and exports, as well as the growth rate of industrial production in March.


The British pound is trading slightly higher against the US currency during today’s morning session, again trying to gain a foothold above the psychological level of 1.3900. On the eve of the pound received support after the meeting of the Bank of England on the interest rate, however, this event did not have a noticeable effect on the quotes. As expected, the British regulator kept the parameters of monetary policy unchanged, however, noted that it will begin the planned reduction of its quantitative easing program in the period from May to August. The UK continues its strong economic recovery from a record recession in 2020, driven in part by high rates of vaccination.


The Australian dollar is slightly declining against the American currency in trading this morning session, consolidating near the local highs, updated the day before. Bidders are in no hurry to open new positions ahead of the publication of the US labor market report for April. Let’s remind that analysts’ forecasts are very optimistic. In particular, it is expected that the number of new jobs outside the agricultural sector will grow by 978 thousand after rising by 916 thousand in March. The unemployment rate for the first time in a long time may fall below 6% – to 5.8%. In the meantime, moderate support for the instrument is provided by statistical data from Australia and published comments of the country’s regulator on monetary policy, which, however, remains very restrained. Anyway, the index of activity in the service sector from AiG in April rose from 58.7 to 61 points.


The US dollar is trading with mixed dynamics against the Japanese yen in today’s Asian session, consolidating near the 109.00 mark. The market is in anticipation of the US report on the labor market for April and is winning back Thursday’s data on jobless claims in the US. Thus, the number of primary applications for the week of April 30 showed a sharp decline from 590 thousand to 498 thousand, which turned out to be significantly better than market expectations at the level of 540 thousand. But the number of secondary applications, on the contrary, increased from 3.653 million to 3.69 million. while analysts had expected it to decline to 3.62 million. Japanese statistics provide insignificant support to the yen today. Thus, the index of business activity in the service sector from Jibun Bank in April strengthened from 48.3 to 49.5 points, which turned out to be better than the market’s neutral forecasts.


Gold prices are showing moderate gains, developing an active bullish momentum that formed in the middle of the week. The instrument is supported by rather weak positions of the US dollar, which is in anticipation of Friday’s publications on the American labor market. Investors are also disappointed with the position of the US Federal Reserve System, as the regulator is in no hurry to draw conclusions about the economic recovery and the beginning of monetary tightening. The instrument is additionally supported by a decline in the yield on US Treasury bonds, which reduces the cost of buying gold.

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