The US dollar remains under pressure in the wake of rising optimism about the gradual weakening of the factor of strict quarantine measures in Europe and the US, which, in turn, stimulate increased demand for risky assets.
The Fed meeting expectedly did not bring anything significantly new. It affirmed the regulator's policy of comprehensive support for the US economy, which will be spent as much time as needed, as stated in the final document. The investors will focus their attention today at the ECB meeting on monetary policy, which is unlikely to be relevant. Given previous support measures, the European regulator will make net purchases this year for 1 trillion 110 billion euros. This is about 112 billion euros per month. It is hardly worth expecting that it will raise the volume of asset repurchases, since this month's EU summit showed that it was not so easy to agree on a volume of 1 trillion euros, although it was believed that it should be increased to 2 trillion euros.
In the currency market, the rally of commodity currencies continues as we expected. The leaders of growth against the US dollar for the month are the Australian dollar (+ 6.86%), the New Zealand currency (+ 3.10%). The Canadian dollar failed to gain a plus by the end of April due to the drop that is happening on the crude oil market, but the recovery in demand for it will most likely push them towards growth.
The main beneficiaries of reducing the impact of the quarantine were shares of companies. As before, we are optimistic about their further positive dynamics. The dominance of apocalyptic forecasts in the market are considered as the desire to take cautious now. Yes, of course, recessions are possible, but the growth in demand for risk will only increase as the world economy leaves the quarantine collapse. In this regard, the dynamics of the dollar will be directly proportional to the growth in demand for stocks and the gradual restoration of demand for crude oil and other commodity and commodity assets. Therefore, we believe that the continuation of strengthening of commodity currencies in the first place should be expected, and then commodity currencies.
We expect that the upward dynamics of the Canadian dollar will strengthen in May. At the same time, we believe that the growth of the euro and pound will be noticeably smaller.
Forecast of the day:
The EUR/USD pair may receive support today if a decision is not made to expand the amount of incentive measures at the end of the ECB meeting. In this case, you need to buy a pair on the growth of demand for risky assets, after it breaks through the level of 1.0890 with its likely future growth to the level of 1.0990.
The AUD/USD pair is trading in an upward trend amid rising demand for commodity assets and the global prospects for recovery after the final lifting of quarantine measures. The pair may correct down to the level of 0.6515 amid local overbought, however, if it holds above this level, a resumption of its increase to 0.6685 should be expected.
