USD was Dragged Down by PMI, Gold Soared in the Short Term

2021-05-04 11:39:47


The dollar slipped against a basket of currencies on Monday, giving up some of the previous session's gains as US bond yields fell and weak data weighed on the dollar; the index hit an intraday low after the US ISM data was released; the yield on the 10-year Treasury note was at 1.61 per cent, falling 4.6 basis points to 1.58 per cent. Gold is a short-term rise.

The data shows:

The final PMI value of Markit manufacturing industry in the United States in April was 60.5, expected 60.7, and the previous value was 60.6.

Us ISM manufacturing PMI recorded 60.7 in April, with an expected value of 65, with a previous value of 64.7.

The monthly rate of construction spending in the United States in March was 0.2%, which is expected to be 2%, with a previous value of-0.80%.

The data partly undermined positive market expectations for the US economic outlook and cooled investor expectations of Fed tightening. The slowdown in US manufacturing activity in April may be constrained by a shortage of investment, while accelerating vaccination and massive fiscal stimulus have released a backlog of demand. The data led to lower US bond yields.

The dollar index fell 0.35% to 90.96, chief foreign exchange strategist at Scotiabank, said in a report that Friday's rally in the dollar may not be the beginning of a full rebound, and that the dollar needs to rise further strongly this week to tilt risk towards a rebound in the dollar, which is not optimistic at the beginning of the week. Bearish sentiment on the dollar is rising after a brief pullback. Net short positions in the dollar rose this week to their highest level since the end of March, according to data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The US economy is improving, but "it's not out of the woods yet", Federal Reserve Chairman Colin Powell said on Monday, adding that the upcoming Fed study will show a disproportionate blow to less educated and working parents during the COVID-19 epidemic and recession.

At the same time, the gold short-term soared to 1798, only one step away from the 1800 gate. The yield on 10-year US Treasuries failed to rise above 1.7 per cent last week and has continued to fall since then, providing some support for gold bulls. In addition, the global risks brought about by the outbreak in India have also given gold potential benefits. More importantly, the Fed has yet to signal a shift, leaving gold bulls still looking forward to it.

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