The market sentiment seems to have improved slightly in response to robust macroeconomic data releases from China early Tuesday. In turn, the US Dollar struggles to build on Monday’s gains and US stock index futures trade modestly higher. Building Permits and Housing Starts data will be featured in the US economic docket. Statistics Canada will release the Consumer Price Index (CPI) figures for March later in the day. Investors will continue to keep an eye on central bank speak.
China’s economy expanded by an annualized rate of 4.5% in the first quarter, much stronger than the 2.9% growth recorded in the last quarter of 2022. This reading also came in better than analysts’ estimate for an expansion of 4%. Additionally, Industrial Production expanded by 3.9% and Retail Sales rose by 10.6% on a yearly basis, compared to analysts’ estimate of 7.4%.
After having declined toward 1.0900 on Monday, EUR/USD has regained its traction and climbed above 1.0950 early Tuesday. ZEW Survey – Economic Sentiment for the Eurozone and Germany will be released in the European session.
The UK’s Office for National Statistics reported on Tuesday that the ILO Unemployment Rate ticked up to 3.8% in February. In the same period, the annual wage inflation, as measured by the Average Earnings Excluding Bonus, grew by 6.6% and surpassed the market forecast of 6.25%. Moreover, the Average Earnings Including Bonus rose by 5.9%, matching January’s print. GBP/USD reversed its direction on Tuesday and reclaimed 1.2400.
The minutes of the Reserve Bank of Australia’s (RBA) April 4 policy meeting revealed that policymakers actively considered one more rate hike before deciding to pause. “Members agreed there was a stronger case to pause at this meeting and reassess the need for further tightening at future meetings,” the publication further read. Hawkish tone of the RBA’s minutes helped AUD/USD gain traction and the pair was last seen rising nearly 0.5% on the day at 0.6730.
Annual CPI in Canada is forecast to decline to 4.3% in March from 5.2% in February. The Core CPI is expected to edge lower to 4.2% in the same period from 4.7%. Following Monday’s recovery, USD/CAD stays under modest bearish pressure early Tuesday and trades below 1.3400.
Gold price closed in negative territory on Monday pressured by rising US Treasury bond yields. XAU/USD seems to have found its footing early Tuesday and was last seen trading slightly above $2,000.
USD/JPY is struggling to build on Monday’s gains and trades in a relatively tight channel above 134.00 on Tuesday.
Bitcoin lost nearly 3% on Monday and declined below $30,000. BTC/USD stages a recovery but remains below that key level in the European morning. Ethereum registered losses on Monday but managed to shake off the bearish pressure early Tuesday. At the time of press, ETH/USD was up more than 1% on the day at $2,100.