by Peter Nurse
Investing.com – US Dollar Weaker in the morning of Monday trading in Europe. It is heading for its first monthly decline in five months as the risk environment calms. and growing expectations for a temporary pause in interest rate hikes.
At 3:55 AM ET (07.55 GMT), which tracks the dollar against a group of six other currencies, it was trading down 0.2% to 101.510, gradually declining from a two-decade high of 105.010 seen on. early May
It also rose 0.2% to 1.0753, up 0.2% to 1.2637, maintaining last week’s profitability. Meanwhile, the risk-sensitive currency climbed 0.3% to 0.7184 and rose 0.2% to 0.6549, both near three-week highs.
Volatility tends to improve on Monday. by US stock and bond markets Closed for holidays on Remembrance Day The demand for risk becomes good news aside from China’s easing of COVID-19 measures.
Shanghai said on Sunday that The measures to regulate businesses will be suspended from June 1, while Beijing will reopen some public transport systems and some shopping malls.
This resulted in a decline of 0.7% to 6.6507. The yuan appreciated as the progress of the lockdown measures progressed.
China to release PMI and index on Tuesday and Wednesday. These data will be studied to find clues about the restrictions on COVID-19 measures. What has caused the world’s second largest economy to slow down?
Additionally, expectations for the Fed to halt raising interest rates to avoid a recession have fueled demand for risk, causing the dollar to weaken.
Investors will have the opportunity to hear from several Fed policymakers next week. Starting with the governor of the Fed on Monday. But there’s still plenty of US economic data to study during the week. Lastly, the monthly employment report is widely watched.
Friday’s information for May It is expected to show that the labor market remains strong. Economists expect the economy to add 320,000 jobs in May, while expecting a decline of 3.5 percent.
In Europe, the consumer inflation data for and the United States is due on Monday. and will be carefully studied before launch Estimates coming soon this Tuesday.
EU governments are also set to begin a two-day meeting at the end of the meeting to discuss a sixth set of sanctions against Russia as punishment for aggression against Ukraine. Including the ban on Russian oil.
“We think a combination of significant improvements in the global risk environment and adverse short-term interest rate widening is unlikely. And hence the dollar is expected. (which is now overbought) will find levels soon,” ING analysts said in a note.
“This means that EUR/USD returns below 1.0700 over the next few days will look more likely than any other rally.”
