Dollar shows modest strength

Amid relatively calm forex markets, the dollar exhibits modest strength, lacking clear upward momentum after last week's decline.

By Ahmed Azzam | @3zzamous | 7 May 2024

Market close
  • Dollar shows modest strength in calm forex markets.

  • Japanese Yen emerges as weakest currency.

  • Reserve Bank of Australia maintains cash rate, upgrades inflation forecasts.

Forex markets appear relatively calm today, with the Dollar showing strength but lacking clear upward momentum after last week's decline. The trajectory of the Dollar in the coming days depends on shifts in risk sentiment and movements in other major currencies, given the absence of significant US economic data for the week.

The New Zealand Dollar is the second strongest performer, benefiting from the Australian Dollar's decline following the Reserve Bank of Australia's decision to maintain a neutral stance. The Euro also finds support from better-than-expected Eurozone retail sales data, positioning it as the third strongest currency for the day.

Conversely, the Japanese Yen is the weakest performer, followed by the Australian Dollar and Swiss Franc, while Sterling and the Canadian Dollar hold intermediate positions.

Eurozone retail sales grew 0.8% month-on-month in March, exceeding expectations of 0.6%. EU retail sales increased by 1.2% month-on-month, with notable increases in Poland, Cyprus, and Hungary, and decreases in Sweden, Malta, and Austria.

UK PMI Construction surged to a 14-month high in April, driven by increased activity in commercial projects and civil engineering, though hiring remained subdued.

The Reserve Bank of Australia maintained the cash rate target at 4.35% and upgraded inflation forecasts for 2024, while Japan's PMI Services for April finalized at 54.3, with strong demand and rising costs being notable factors.