The US dollar index is declining and is trading near 102.20. The focus of investors’ attention is on the comments of leading Federal Reserve officials regarding further monetary policy and debt limit issues. Atlanta Federal Reserve Bank President Rafael Bostic said yesterday that he does not expect interest rate cuts until at least 2023, even in the event of a recession. The official noted that as long as price increases remain high and the labor market remains strong, inflation risks are rising. Bostic believes that a new tightening of monetary policy is now more likely. Traders are also analyzing the probability of default in the US. The latest round of negotiations took place last week. However, Joe Biden said that the parties had not yet reached a compromise. Against this background, the decline of the dollar may continue.
SELL STOP 102.20/TP 101.50/SL 102.40
GBP/USD
The GBP/USD pair is trading above 1.25. Today, traders await the publication of March data on the labor market, which may affect further actions of the Bank of England. According to forecasts, the unemployment rate will remain the same – 3.8%, and employment will increase by 160 thousand people. Particular attention should be paid to the average wages data as it may cause prolonged inflation. Experts believe that salaries excluding bonuses will rise from 6.6% to 6.8%. As a result, the regulator may continue to tighten its monetary policy, which will support the pound. If the forecast is confirmed, the GBP/USD pair may end the current session above 1.26.
BUY STOP 1.2500/TP 1.2600/SL 1.2470
Brent
Brent crude is consolidating near $75.50. Prices are under pressure from weak data from China. The exports volume in April slowed down to 8.5%, while the consumer price index corrected to -0.1%, confirming low consumer activity. In general, the latest statistics indicate a weaker economic recovery than previously expected, which may lead to weaker demand for oil from the world’s leading consumer. The negative factors for oil are also the risks of a default in the US and a banking crisis, which may worsen the economic outlook.
SELL STOP 74.50/TP 73.00/SL 75.00
