Forex news from the European trading session - 4 May 2021

Headlines:

Markets:

  • USD leads, NZD lags on the day
  • European equities mixed; S&P 500 futures down 0.2%
  • US 10-year yields flat at 1.596%
  • Gold down 0.5% to $1,784.73
  • WTI up 1.5% to $65.47
  • Bitcoin down 1.1% to $56,164

There was a lack of news flow on the session but the dollar did its own thing as it recouped losses from yesterday and then some in European morning trade.

The greenback pushed higher across the board, with EUR/USD falling from 1.2035 to 1.2000 while GBP/USD eased from 1.3890 to 1.3850 before keeping around 1.3870 levels.

USD/JPY kept more buoyed as well, moving up from 109.10 to 109.49 before easing back to 109.10-20 levels now as Treasury yields pare its earlier advance.

Meanwhile, USD/CAD pushed higher from 1.2290 to 1.2335 as buyers recapture some near-term control in breaching near-term resistance at 1.2313-22.

AUD/USD is pushed lower from 0.7740 to 0.7710 while NZD/USD also fell by 1% from 0.7180 to 0.7125 ahead of North American trading currently.

Elsewhere, gold and silver are also marked a little lower amid a stronger dollar while oil is pushing higher as WTI breaches $65 again. Ethereum continues to capture the headlines in the crypto space as it nears $3,500 while Bitcoin struggles.

With the market continuing to keep a focus on a strong US economy, the inflation theme (higher cost inflation may be a sustained issue), the dollar looks to be finding some added support with May seasonals also backing that up; technicals also helping.

That despite Treasury yields keeping relatively calm, although 10-year breakevens are up to 2.43% - its highest since 2013.

Keep an eye on yen and franc pairs as such as they could start to turn after a bit of a retracement should this narrative continue to take hold.