US Dollar Index Is in the Red. Investors Expect the Fed's Decision on the Interest Rate

Yesterday, the US dollar weakened against a basket of major currencies despite positive economic statistics. Thus, consumer confidence index CB rose in April to 129.2, while experts expected 126.0. The index of pending home sales grew in March by 3.8%, although investors forecasted an increase by only 1.1%. However, the dollar index (#DX) updated weekly lows and closed in the negative zone (-0.39%). Today, investors have taken a wait-and-see attitude before the Fed’s decision on the interest rate. It is expected that the regulator will leave the figure at 2.50%.

The euro strengthened against the US dollar after the publication of optimistic economic data from Germany and the eurozone. The number of unemployed fell in April by 12K instead of the forecasted reduction by 6K. The eurozone GDP (YoY) grew by 1.2% instead of 1.1%, the eurozone GDP (QoQ) also grew by 0.4% instead of 0.3%.

Today in the Asian trading session weak economic data were released in New Zealand. Thus, employment declined in the first quarter by 0.2%, although experts expected a growth by 0.5%. Volatility in foreign exchange markets is reduced, as many countries celebrate International Labor Day.

The "black gold" prices are falling. At the moment, the WTI crude oil futures are testing the mark of $63.20 per barrel. At 17:30 (GMT+3:00) crude oil inventories will be published in the United States.

Market Indicators

Yesterday, in the US stock market, a variety of trends was observed: #SPY (+0.05%), #DIA (+0.13%), #QQQ (-0.77%).

The yield on 10-year US government bonds has fallen. Currently, the indicator is at the level of 2.50-2.51%.

The news feed on 05.01.2019:

- the manufacturing PMI in the UK at 11:30 (GMT+3:00);
- ADP nonfarm employment change in the US at 15:15 (GMT+3:00);
- ISM manufacturing employment in the US at 17:00 (GMT+3:00);
- the Fed's decision on interest rate at 21:00 (GMT+3:00).

We also recommend paying attention to the speech by the head of the Bank of Canada Poloz.

by JustForex, 2019.05.01

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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