· The dollar held near three-week highs on Tuesday as a drop in market volatility ramped up demand for riskier assets.
With 10-year U.S. Treasury yields up by more than 20 basis points over the past four weeks to a one-month high, demand for U.S.-denominated assets has grown.
Broader market moves were quiet as financial markets reopened after the Easter holiday.
The dollar index against a basket of six key rivals rose to 97.39, edging toward the 2019 high of 97.71 struck in early March.
“We are in a very range-bound market with the broader picture being more positive for the dollar relative to the euro after the weak eurozone PMI manufacturing data last week,” said Ulrich Leuchtmann, head of FX strategy at Commerzbank.
The dollar’s moves against the euro and sterling were small, with the single currency lower at $1.1243 and the pound up at $1.2986.
· The Japanese Yen picked up fresh bids last hour, knocking-off the USD/JPY pair to fresh eight-day lows at 111.65 levels amid souring sentiment, as the ongoing US-Iran tensions appear to rise. Although, the spot quickly bounced-off lows and reverted to 111.80 region following dovish BOJ’s Maeda.
The USD/JPY pair traded inside a 50 pips' range last week and continues consolidating mid-way between the extremes of such a range. Nothing has changed from a technical point of view, as the 4 hours chart shows that the price is incapable of surpassing a directionless 20 SMA, but holds above a bullish 100 SMA that crossed above the 200 SMA. Indicators in the mentioned chart lack directional strength, attached to their midlines. Given that the pair is near yearly highs, the upside is favored, although a downward extension below 111.40, will likely see the bullish potential decrease, with a downward extension expected afterward.
Support levels: 111.75 111.40 111.10
Resistance levels: 112.15 112.50 112.85
· With the U.S. and China seemingly nearing the conclusion of a trade deal, many experts have predicted that Washington could next turn up tensions with the European Union.
Those worries came as the U.S. and some of its European allies recently clashed on issues such as Huawei’s role in 5G development — something the administration of President Donald Trump considered contentious.
But it would be a mistake if the Trump administration decided to impose additional tariffs on European products because of such differences, according to Anthony Gardner, who served as American ambassador to the EU from 2014 to 2017.
Gardner said he regrets that the U.S., under the Trump administration, has seemingly chosen to view the EU as foe. He added that the two economies should work together even more, especially when it comes to tackling concerns about China’s trading practices.
· Herman Cain, facing resistance from his own political party as U.S. President Donald Trump’s pick to fill a seat on the Federal Reserve Board, withdrew Monday from consideration for the post, citing what he said would be a decrease in influence and pay.
Four Republican U.S. senators have expressed reservations about seating Cain at the Fed, likely enough to deny him the support he needed to secure Senate confirmation for the post.
· China’s claim of stronger-than-expected economic growth in the first part of this year may be tempting policymakers to pare back stimulus. Analysts say that would be a mistake.
But, Nomura cautioned, China’s growth recovery is “not solid yet” and growth could falter again.
“We believe the pace of monetary easing will slow, but it is still too early to withdraw monetary easing measures despite the limited monetary policy scope,” they said.
· Oil prices hit highs on Tuesday after Washington announced all Iran sanction waivers would end by May, pressuring importers to stop buying from Tehran.
Despite the move by Washington, analysts said global oil markets would be able to cope with the Iran disruption as there was enough spare capacity from other suppliers.
Brent crude futures were at $74.58 per barrel at 0628 GMT, up 0.7 percent from their last close and their highest level since November 2018.
U.S. West Texas Intermediate (WTI) crude futures marked their strongest since October 2018 at $65.10 per barrel, up 0.8 percent from their previous settle
· India will get additional supplies from other major oil producing countries to compensate for the loss of Iranian oil, India’s Petroleum and Natural Gas Minister Dharmendra Pradhan said on Tuesday.
The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers which had allowed Iran’s eight biggest buyers, most of them in Asia, to continue to import limited volumes.
· Goldman Sachs expects the United States’ decision to end exemptions from sanctions for countries still buying oil from Iran to have a limited impact on crude prices, even though the timing is likely to have caught energy market participants by surprise.
“While we acknowledge the near-term upside price risks, we reiterate our fundamentally derived Brent price trading range of $70-75 per barrel for the second quarter of 2019,” the U.S. investment bank said in a research note published Monday, Reuters reported.
Reference: CNBC, Reuters, Daily FX, FX Street
Thai
Eng