The euro weakened against the oversold dollar. German GDP shrank in the first quarter more than expected preliminary data showed on Friday. Technically, the EURUSD move put the currency pair in a short term downtrend. The Federal Reserve meeting showed that no policy changes are expected any time soon.
The British pound was little changed. Uncertainty ahead of the Bank of England’s meeting and the upcoming elections in Scotland kept sterling depressed, while persistent “risk on” sentiment provided support.
he Japanese yen weakened against the dollar. Rising US Treasury bond yields supported the dollar, while the rising number of infections in Japan were a drag for the yen.
Gold prices remained little changed but were capped below the $1,800 level.
US indexes retreated as high valuations kept investors cautious, while the earnings season continued to show strong results. Of the 303 companies in the S&P 500 that have reported so far, 87% have topped analysts’ earnings estimates – the highest beat rate on record. This week, PayPal, Moderna and Cronos are scheduled to release their financial reports.
Oil prices rose continued to rise. Traders were reassured by OPEC+ projections of robust demand by the end of the year, while rising numbers of COVID-19 cases in India, Brazil and Thailand were already factored in the oil prices. An improved health situation in Europe instilled hopes that the summer (driving) season will not be lost this year.