The week ahead presents many ‘high importance’ risk events ranging from US CPI data to central bank decisions in Canada, New Zealand and the European Union. The FOMC minutes of the March meeting will also provide more insight on Fed thinking, although, the trend of hotter US data may diminish the impact of what was discussed during the March meeting.
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US Dollar (DXY) in Focus Ahead of CPI Data, NFP Boost Proved Short-Lived
Friday’s hotter-than-expected jobs data for March initially sent the dollar higher but the catalyst failed to hold into the close. US CPI data will definitely draw a huge focus from the market due to the stubborn PCE figures and generally robust US data that may delay rate cuts even further.
US Dollar Basket (DXY) Daily Chart
Source: TradingView, prepared by Richard Snow
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The Risk of a Broader Conflict in the Middle East Triggered Gold’s Safe Haven Push
Gold has gone from strength to strength despite rising US yields. The greenback (DXY) registered a minor decline last week but US 2-year and 10-year treasury yields rose for the week.
The prospect of rates remaining on hold for longer, has the potential to see more hawkish repricing for treasuries that increases the opportunity cost of holding the non-interest bearing commodity.
Recent escalations in eastern Europe and the Middle East raise the allure of gold due to its safe haven properties but the market has returned to massively overbought territory, hinting at a potential cooling off period at the start of the week in the absence of further escalation.
Gold (XAU/USD) Daily Chart
Source: TradingView, prepared by Richard Snow
TECHNICAL AND FUNDAMENTAL FORECASTS – W/C April 8
US Dollar’s Outlook Rides on US Inflation Data – EUR/USD, USD/JPY, GBP/USD
The U.S. dollar lost ground this past week, but the tide could turn back in its favor in the coming days, especially if Wednesday’s U.S. inflation report surprises to the upside and triggers a hawkish repricing of interest rate expectations.
Gold Price Weekly Forecast – Fresh Record Highs on Heightened Israel/Iran Fears
Gold is pressing further into record high territory as escalating tensions between Israel and Iran continue to fuel the precious metal’s safe-haven bid.
Euro Forecast: April ECB Meeting Likely to be a Prelude for a June Cut
The euro recovers ahead of the ECB meeting which is likely to point to June for that first rate cut. Encouraging sentiment data and soft inflation provide conflicting dynamics
British Pound Weekly Forecast: Lack of Data Will Leave USD in Charge
The British Pound heads into a new trading week under pressure against the United States Dollar as once-reliable monetary-policy support continues to ebb.
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX