US data fails to inspire the dollar

<p>The USD continues to trade on the back foot as FX markets look for fresh correlations to other asset markets. Volatility remains at elevated levels […]</p>

The USD continues to trade on the back foot as FX markets look for fresh correlations to other asset markets. Volatility remains at elevated levels as investors witness a rally in oil which is closely correlated with a bid tone in the euro, as FX markets adjust to a lower fixed income and equities outcome as a negative for the dollar. The US data highlighted a stronger fundamental picture as both releases should have inspired the dollar. The trade data showed solid US imports which supports the weaker Q1 growth theory as a temporary measure and the ISM data surprised to the upside – yet EUR/USD rallied from a session low of 1.1070 yesterday to 1.1270 (at the time of writing).

The NZD fell over 1% in the Asian session as employment data added to the disappointment of the latest milk price auction. The unemployment rate rose to 5.8% in Q1 versus the consensus forecast of 5.5%, which adds to the pressure on the RBNZ to stimulate the domestic economy with a cut in interest rates.

The UK services PMI data will be the last release before voters head for the polling stations, with the bookmakers calling a hung parliament outcome as a 93% certainty. The US session gives insight to the US jobs report with the ADP survey as Fed chair Janet Yellen is scheduled to speak in Washington.



 1.1175-1.1055-1.0920 | Resistance 1.1295-1.-1.1450-1.1535



119.35-118.30-117.50 | Resistance 120.50-120.85-121.55



Support 1.5070-1.4920-1.4855 | Resistance 1.5305-1.5450-1.5530

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.