Euro Falls as New Crisis Looms

EUR

The euro lost ground against rivals for the second consecutive day on woes of a new euro crisis. Yesterday, Germany's highest court granted the European Central Bank three months to clarify the purchases under its bond-buying program, else the Bundesbank will be prohibited from participating. On the other hand, the tensions between wealthy northern European countries and poorer southern European countries are adding pressure on the European Central Bank. Moreover, the economic indicators continued to show the severe impact of the coronavirus on the European economies. The EURUSD tumbled to $1.0816, the EURUSDJPY tumbled to 115.04, the lowest since 2017, and the EURAUD declined to 1.6778.

USD

The dollar index, which measures the greenback against a basket of major currencies, settled higher for the second consecutive day at 99.80, benefiting from weak rival's performance. The hit for risk sentiment during the early trading hours of the week supported the demand for dollar safety, and the buck was able to protect gains and add to them. Currently, market participants are weighing in the prospects of reopening the economy and looking forward to the economic figures to asset the impact of the virus on the economy.

Equities

Major US stock-index extended upside rally as investors focus on the reopening of business. Several states are reopening parts of the economy during the first two weeks of May, and the likelihood of bringing life back to normal in more states is supporting investors' risk appetite. The Dow Jones Industrial Average futures edged higher to 23981, the S&P500 futures rose to 2884, and Nasdaq futures rallied to 9008.

Metals

Gold prices continue to trade in a tight trading range awaiting fresh fundamental drivers. The price of a gold ounce hovered above $1700, the price of a silver ounce inched higher to $15.16, while palladium futures extended decline to a six-week low of $1732.

Oil

Oil prices extended gains on optimism over a recovery in demand levels. Market participants are expecting a bounce in demand as countries ease lockdown measures. On the other hand, the falling trend in US inventories for the past two weeks eased woes over excess supply. The American Petroleum Institute reported a buildup of 8.4 million barrels in US weekly crude oil stock. Market participants are looking forward to the official numbers by the US Energy Information Administration and the Seevol Cushing storage report later today. The West Texas Intermediate crude June delivery rose to $26.05, and Brent blend July delivery climbed to $32.11.

Major Economic Events

Disclaimer 

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM.COM. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.