What you need to know on Tuesday, May 5th:
Risk aversion led the FX board on Monday, amid mounting tensions between the US and China. US President Trump Trump said that he has strong evidence that the coronavirus originated in a Wuhan lab, although later in the that, the WHO said that it didn’t receive any evidence from the US on the matter. Trump also said that the Asian giant is not complying with the trade deal quotas, and menaced to terminate the phase one. He already threatened the country with new tariffs during the weekend.
The dollar was generally stronger although major pairs remained within familiar levels. EUR/USD eased towards the 1.0900 figure, weighed by a downwardly revised Union’s services PMI and plummeting investors’ sentiment in May.
The pound performed better than the common currency. GBP/USD bounced from 1.2404 to settle around 1.2450. The UK will start trade negotiations with the US this Tuesday.
Japan is in the middle of its golden week, and local markets will remain closed this Tuesday.
Commodity-linked currencies trimmed intraday losses and posted modest gains against the dollar, despite the weak tone of equities. Wall Street bouncing from daily lows and oil’s advance lent support.
Gold prices held on to higher ground, with spot settling just above the $1,700.00 level.
Crude oil prices advanced with WTI ending the day around $21 a barrel, reversing an early decline. Nevertheless, concerns persist as oil producers keep pumping while demand remains subdued amid the ongoing coronavirus crisis.
Bitcoin and major altcoins recover from losses; recovery is limited