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Currency Market Analysis

May 25, 2021 | Currency Market Analysis

Global Themes

USDCNH at three-year lows as shares rebound

The greenback slipped lower overnight as US shares improved.

US shares shook-off a couple of negative weeks starting the new week with the Dow Jones up 0.5% and the Nasdaq up 1.8%.

The USDCNH fell 0.4%.

The EURHKD gained 0.3% while the HKDJPY fell 0.2%.

Kiwi flies

The kiwi was stronger across the board yesterday after New Zealand retail sales data was released.

The result surprised markets with a 2.5% gain versus expectations for a 1.8% fall.

However, the Aussie’s gains were capped after the recent sell-off in iron ore prices, down 25% over the last eight sessions, hit the AUD (source: Refintiiv, 25 May 2021).

Euro gains to be tested

Early focus is on Australian data with the goods trade balance due at 9.30am.

Later, German business confidence is released after improving growth expectations caused the euro to gain strongly over the last eight weeks.

The German Ifo number is due at 5.00pm.

US data is also in focus with consumer confidence due tonight.

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