In light trading ahead of the holiday weekend, investors’ risk-on mood persists – it’s been in place all week. Chinese tech shares spiked higher after Alibaba and Baidu reported better-than-expected sales. The S&P is on track for its first weekly gain in two months. Upbeat US economic data released this morning is helping fuel the equity buying – consumer spending for April rose 0.9% and for March it was revised to +1.4%, up from +1.1%. The dollar is broadly lower, and US T-bond yields are lower by 2 bps. Oil and gold prices are little changed. US financial markets are closed on Monday for Memorial Day.
May 27, 2022
EUR/USD 1.0748 GBP/USD 1.2652 USD/CAD 1.2732 AUD/USD 0.7164 USD/JPY 126.86 USD/CNH 6.7095 USD/ILS 3.3446 USD/MXN 19.6075 USD/CHF 0.9556 USD/INR 77.56 USD/BRL 4.7519 USD/SGD 1.3680 USD/DKK 6.9215 USD/SEK 9.8005 USD/NOK 9.4432
The dollar is broadly lower amidst the market risk-on mood. The highest yielding currencies –NZD, CAD, GBP – were outperformers. A slew of US economic data for April released this morning were somewhat upbeat. While real personal spending slightly exceeded expectations, personal income and PCE deflator data met expectations. US financial markets will be close on Monday for Memorial Day.GBP
In line with broad weakness in the USD, the UK pound reached $1.2667 earlier in the morning, its highest versus the dollar in a month. PM Boris Johnson said that “the UK can dodge a recession in the months ahead even as the cost of living crisis sets the stage for a ‘difficult” period. There were no UK economic releases today.EUR
The euro changed little overnight, it managed to reach its highest level in a month at $1.0765. There were no significant events or economic data releases to impact the euro.CAD
The Canadian dollar edged higher, and in line with broad dollar weakness. USD/CAD dropped to 1.2728, its best level versus the dollar since early May. There were no significant events nor economic releases for Canada. Traders await next week’s slew of data releases, including Retail Sales, and GDP. More importantly, the Bank of Canada meets on June 1, and a 50 bps hike to 1.50% is expected.ASIA/PACIFIC
The CNY made solid gains overnight, USD/CNY reversing a 1-week uptrend. Upbeat sales data from Alibaba and Baidu fueled demand the currency. Traders await next week’s PMI data for May.
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