US Dollar clings to Friday’s recovery gains to start the week

Following the sharp selloff seen for the majority of the previous week, the US Dollar (USD) managed to erase some of the losses it suffered against its rivals ahead of the weekend. The US Dollar Index keeps its footing at the beginning of the new week as investors await the next catalyst. Federal Reserve Bank of New York’s Empire State Manufacturing Survey will be the only data featured in the US economic docket and market participants will pay close attention to comments from central bankers.

On Friday, the US Census Bureau reported that Retail Sales in the United States declined 1% on a monthly basis in March to $691.7 billion. This reading followed February’s contraction of 0.2% and came in worse than the market expectation for a decrease of 0.4%. Nevertheless, hawkish comments from Fed policymakers helped the US Dollar gather strength during the American trading hours. Additionally, the one-year inflation expectation component of the University of Michigan’s Consumer Sentiment Survey jumped to 4.6% in April from 3.6% in March, providing an additional boost to the USD.

Early Monday, the benchmark 10-year US Treasury bond yield holds steady at around 3.5%, supporting the USD. Meanwhile, US stock index futures trade modestly higher on the day and the US Dollar Index clings to small daily gains above 101.50.

Following Friday’s sharp pullback, AUD/USD has managed to stabilize above 0.6700. In the early trading hours of the Asian session on Tuesday, the Reserve Bank of Australia will release the minutes of its last policy meeting and the Chinese economic docket will feature first-quarter Gross Domestic Product (GDP) figures.

EUR/USD suffered large losses on Friday but ended up closing the seventh straight week in positive territory. Early Monday, the pair fluctuates in a tight channel below 1.1000. Later in the day, European Central Bank (ECB) President Christine Lagarde will be delivering a speech.

GBP/USD has managed to recover above 1.2400 in the European morning on Monday following Friday’s drop. Sir Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England, is scheduled to speak at 1300 GMT.

Gold erased nearly all of its weekly gains on Friday but closed the week slight above $2,000. XAU/USD edged higher early Monday and was last seen trading in positive territory slightly above $2,010.

USD/JPY trades in positive territory at around 134.00 to start the new week on the back of Friday’s impressive rally.

Bitcoin failed to find direction over the weekend but came under renewed bearish pressure early Monday. BTC/USD was last seen losing more than 1% slightly below $30,000. Ethereum extended its rally and touched its highest level since May at $2,142 on Sunday. ETH/USD seems to have gone into a consolidation phase early Monday at around $2,100.

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