Financial markets experienced major disruptions in currency markets. After a positive policy narrowing, the Euro jumped up concerning the US Dollar, while the Australian Dollar started to form a bottom withhold mixed advice. The EUR/USD currency pair extended Friday’s rebound. It managed to rise above the key 1.1400 level, marking a robust start for the Euro to this week.
AUD/USD moved lower, consolidating in the sub 0.6500 area. This came on the heels of a decidedly bullish performance, as it hit a new year-to-date high just yesterday. During Tuesday’s Asian session, the AUD/USD pair oscillated wildly. This move marks a clear reversal in the short-term downtrend. This modest stabilization comes against a backdrop of conflicting signals that are shaping the Australian dollar’s (AUD) path forward.
Indeed, market analysts think the EUR/USD pair can go even higher than that. Yet they are especially concentrated beyond the psychological level high at 1.1500 and further. Recent moves in the currency markets can be attributed to recent economic developments more generally, including the ongoing US-China trade negotiations. Then came the shock drop from President Trump’s announcement that sent investor sentiment crashing. By pushing that deadline for US-EU trade talks to July 9, the strength of the Greenback took a beating.
Even with these new developments, we still saw some very interesting dynamics play out in the gold market. Gold prices remained firm above $3,330 per troy ounce. The week started on a weaker note, with topside gains limited to the $3,350 area. This recent wave of positive sentiment to overall markets has put a damper on gold’s run. Investors are floating new ideas as the dollar continues to rise and the ruble continues its decline.
Note that this upcoming Monday, 5/29, US financial markets will be closed for Memorial Day. This closure will affect trading dynamics, as investors will be closing positions ahead of the holiday. With the EUR/USD uptrend and AUD/USD holding near its YTD peak, market participants remain vigilant for any new data or developments that could shift the current landscape.