Weekly Market Update 30 Apr – USD remains bullish with improvement in consumption expenditure while FOMC left interest rates unchanged

Weekly Market Update 30 Apr – USD remains bullish with improvement in consumption expenditure while FOMC left interest rates unchanged

1. The USD ended April with a strong boost on the back of upbeat macroeconomic data releases, pushing the US Dollar Index to a high. Personal income and expenditure figures both rose in March, along with an improvement in consumer sentiment in April. The Fed left interest rates and the pace of asset purchases unchanged, though acknowledging an uptick in economic activity as the market recovers.

2. The Bank of Japan left interest rates unchanged as expected, and revised its growth forecast of the fiscal year ending Mar 2021 upwards, citing stronger expected demand. However, inflation rates continue to fall short of forecasts despite a multitude of stimulus and monetary easing packages. The JPY fell to near three-week lows against the dollar on the continued positive USD momentum.

3. In the Eurozone, the GDP contracted at 0.6% in Q1, indicating a second technical recession in over a year. Despite unemployment rate coming in better than expected at 8.1%, European stocks closed lower while the EUR slid against the dollar.