Dollar shrugs off yields’ decline, gold shines, consumer confidence eyed

The US dollar is rising after robust retail sales, despite falling yields and ahead of consumer confidence. Gold and oil are higher. Chinese data somewhat missed estimates, causing some market caution amid ongoing gains. Cryptocurrencies are off their highs.

US bonds have received healthy demand, pushing yields lower despite upbeat US data. Retail Sales jumped by 9.8% in March, considerably better than expected, while jobless claims tumbled to 576,000, significantly exceeding estimates as well. The dollar reacted positively to the data, with EUR/USD backing off 1.20 and GBP/USD slipping toward 1.38.

Gold has been benefiting from lower returns on US debt, climbing above $1,760. Oil prices also remain elevated amid expectations for strong demand.

China reported an annual growth rate of 18.3% in the first quarter of 2021, skewed upward by the pandemic in the parallel period in 2020. However, industrial output disappointed with an increase of 14.1%, pouring cold water on the excitement for a global recovery.

US data: Another big bulk of US data awaits traders, including Building Permits, Housing Starts, and the University of Michigan’s preliminary Consumer Sentiment read for April.

Coronavirus: The US vaccination campaign continues at full speed, with over three million doses injected per day. Authorities continue assessing safety concerns around Johnson & Johnson’s inoculation, and that may last weeks. France has surpassed the grim milestone of COVID-19 deaths as it and many other European countries struggle with a harsh wave of infections.

Cryptocurrencies have retreated from their highs, with Bitcoin changing hands below $62,000, Etehreum around $2,400 and XRP under $1.70.

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