As the Reserve Bank of Australia cut interest rates by 25bp, from 2% to 1.75%, the Australian Dollar took a sharp plunge. Even though the global economy has a seen an overall growth but the pace of growth is still lower than expectation. The Euro continues to climb on the back of the weaker US dollar while the traders wait for the Non – Farm Payroll data on Friday this week. .
- Oil and GOLD: Oil has retreated from 2016 highs as rising production in the Middle East outweighed a decline in U.S. output and a slide in the dollar. OPEC crude production rose in April to 32.64M barrels per day, close to the highest level in recent history. We saw the yellow metal rally as Gold tried to break through the $1300 levels again because of the weaker US dollar across the board. Federal Reserve is the main factor behind the gold rally because of their cautious stance towards higher US interest rates.
- Stocks: U.S. stocks posted their biggest one-day advance in more than two weeks, putting the Dow industrials and S&P 500 within 2.3% of their records. While stocks have been lifted by rising oil prices and the U.S. Federal Reserve’s cautious stance on interest rates, the rally has slowed after major U.S. indexes rebounded from February lows.
- Currencies:The US Dollar lost ground and is seen down against most of its counterparts, the EURUSD went on to touch the $1.1564 levels while the GBPUSD advanced up to 1.4695, its highest in four months. Even with the poor UK data which pointed towards the slowdown in the UK economy, relief over the possibility of a Brexit has kept the Pound surging. The USD/JPY plunged to a fresh 18month low of 106.13 early Asia before posting a shallow bounce.
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