Euro Eases ahead of ECB Meeting

EUR

The Euro drifted lower against rivals as investors await the outcome of the European Central Bank monetary policy meeting. The bank is widely expected to keep interest rates unchanged. However, there are some prospects that the ECB would extend its assets purchases program, which started in March. The European Central Bank unveiled a Pandemic Emergency Purchase Programme of 750 billion euros in early March to offset the impact of the COVID19 outbreak on the European economy. The EURUSD eased to $1.1198 after testing $1.1257, its highest level since March 12.

USD

The dollar index, which measures the greenback against a basket of major currencies, bounced off its lowest level in more than two months, rising to 97.62 on encouraging economic data. The ADP Nonfarm Employment Change report suggested that the US economy lost only 2.76 million jobs in May, well below estimates of 9 million. Moreover, the ISM Non-Manufacturing PMI rose to 45.4 in May from 41.8 in April. Market participants are looking forward to the weekly jobless claims to follow up on the developments of the labor market at the end of May. The USDJPY rose to 109.14, the GBPUSD declined to $1.25, and the AUDUSD dropped to $0.6881.

CAD

The Canadian dollar was almost steady against peers following the monetary policy meeting of the Bank of Canada. The board decided to keep interest rates unchanged at 0.25%, confirming that it is effective and currently not considering negative interest rates. On the other hand, the bank scaled back the frequency of some operations as conditions improved, but expressed commitment to continue asset purchases until the economic recovery is well underway. Currently, the USDCAD is hovering around 1.35.

Equities

Major US stock index futures settled sharply higher amid growing optimism over life coming back to normal. Wall Street ignored the ongoing riots and the US-China tensions, cheering the solid upside rally. On the other hand, the better-than-expected economic sentiment lifted risk appetite as they suggest that the impact is not as bad as anticipated. The Dow Jones Industrial Average futures rose to a three-month high of 26347, the S&P500 futures ascended to 3105, and Nasdaq futures climbed to 9728, slightly short from logging a new record high.

Gold

Gold prices fell sharply amid enhanced risk sentiment where the price of a gold ounce fell to a one-month low of $1689. The precious metal managed to recover part of its losses during the Asian session. The price of a silver ounce extended declines, dropping to $17.47, and palladium futures held steady near $1950.

Oil

Oil prices faltered at their highest levels in three-months amid doubts over OPEC+ cuts. Saudi Arabia and Russia agreed to extend the 9.7 million barrels cut till July, but failed to agree on setting an online meeting raising investors’ doubts over the solidness of the deal. On the other hand, Gulf producers are not planning to extend their voluntary additional output cuts of 1.18 million barrels beyond June. Market participants neglected the US Energy Information Administration report, which showed a decline of 2.077 million barrels last week and focused on OPEC+ outcome. The West Texas Intermediate crude July delivery dropped to $36.37, and Brent Blend August delivery declined to $39.03.

Major Economic Events

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