Forex Today: US Dollar holds firm on Middle East flare-up ahead of RBA, US data
Here is what you need to know for Tuesday, May 5:
The US Dollar Index (DXY) holds a firm tone near the 98.40 price zone, supported by safe-haven demand amid ongoing Middle East hostilities that keep markets cautious, with headlines suggesting that Iran allegedly attacked a United States (US) military ship despite US denials. These activities are fueling uncertainty, limiting risk appetite, and underpinning the Greenback.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.19% | 0.30% | 0.02% | 0.16% | 0.42% | 0.41% | 0.22% | |
| EUR | -0.19% | 0.06% | -0.17% | -0.03% | 0.23% | 0.21% | 0.01% | |
| GBP | -0.30% | -0.06% | -0.26% | -0.10% | 0.16% | 0.12% | -0.04% | |
| JPY | -0.02% | 0.17% | 0.26% | 0.11% | 0.34% | 0.34% | 0.14% | |
| CAD | -0.16% | 0.03% | 0.10% | -0.11% | 0.24% | 0.22% | 0.05% | |
| AUD | -0.42% | -0.23% | -0.16% | -0.34% | -0.24% | -0.04% | -0.20% | |
| NZD | -0.41% | -0.21% | -0.12% | -0.34% | -0.22% | 0.04% | -0.18% | |
| CHF | -0.22% | -0.01% | 0.04% | -0.14% | -0.05% | 0.20% | 0.18% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD trades with a soft tone near the 1.700 price zone, struggling to gain traction amid a stronger US Dollar (USD) that caps upside attempts amid cautious market sentiment.
GBP/USD also drifts lower near the 1.3540 zone, pressured by a firmer Greenback as traders avoid aggressive positioning ahead of key global catalysts.
USD/JPY edges slightly higher near the 157.10 level, supported by safe-haven flows into the USD, although the Japanese Yen (JPY) remains somewhat resilient due to its own safe-haven appeal.
AUD/USD slides near the 0.7170 area, holding a cautious tone ahead of the Reserve Bank of Australia's (RBA) monetary policy decision. The RBA is widely expected to deliver a 25-bps rate hike, which could lift the Official Cash Rate (OCR) to 4.35%. While expectations of tighter policy support the Aussie, geopolitical uncertainty and USD strength are capping gains.
West Texas Intermediate (WTI) Oil prices remain elevated near the $105.00 per barrel as Middle East problems keep concerns about supply disruptions alive, adding to inflation worries and supporting commodity-linked narratives.
Gold prices fell toward the $4,524, benefiting from safe-haven demand amid geopolitical uncertainty as investors seek protection against escalating risks and unclear global developments.
What’s next in the docket:
Tuesday, May 5:
- Australian RBA Interest Rate Decision
- Australian RBA Monetary Policy Statement
- Australian RBA Rate Statement
- Chinese Consumer Price Index April MoM YoY
- US S&P PMIS April
- US ISM Services PMIS
- US JOLTS Job Openings March
- US New Home Sales February and March MoM
- New Zealand Employment data
Wednesday, May 6:
- Chinese Caixin Services PMI April
- Germany, France, Italy, Eurozone HCOB Services PMI April
- Eurozone Producer Price Index March MoM YoY
- US ADP Employment Change April
- Canadian Ivey PMI April
- Japanese Labor Cash Earnings March YoY
- Japanese BoJ Monetary Policy Meeting Minutes
Thursday, May 7:
- Australian Trade Balance
- Germany Factory Orders March MoM YoY
- Eurozone Retail Sales March MoM YoY
- US Challenger Job Cuts April
- US Initial Jobless Claims
- US Nonfarm Productivity Q1 Prel
- US Unit Labor Costs Q1 Prel
Friday, May 8:
- Germany Industrial Production March MoM YoY
- Eurozone Trade Balance March
- Canadian Employment data
- US NFP report
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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