Currency markets in the first week of May will largely be dominated by economic event-driven moves in the US dollar.
The euro could also see some significant movement, as the market-friendly centrist, Emmanuel Macron, continues to poll far ahead of his anti-euro rival, Marine Le Pen. The EURUSD could therefore be the pair to watch and trade amid an exceptionally busy economic schedule next week.
Several markets across Asia and Europe were closed for the May Day holiday, hence it is expected very little liquidity and volatility for the most part of the day.
Busy week brings Fed meeting and jobs data
The two most important US-based economic events happening next week are Wednesday’s May FOMC meeting and Friday’s US jobs report for April.
Even though no major policy change is expected, global financial markets will be eyeing Federal Reserve policy meeting for fresh hints on the timing of the next U.S. rate hike.
“It is hard for markets to make big moves with holidays in so many places today, and people are just waiting for more information to come out,” said Harumi Taguchi, principal economist at IHS Markit in Tokyo.
Friday brings the eagerly anticipated US jobs data for April, including the monthly non-farm payrolls report. The current outlook for April’s gain in jobs is around 195K.
Euro may fall even as Macron wins
Considering the common currency, in addition to the anticipation surrounding the French presidential election’s final round on the following weekend, next Wednesday is the day when the euro area’s preliminary flash GDP for the first quarter will be unveiled.
The second round of France’s presidential election could end with Macron’s triumph, as opinion polls predict that Emmanuel Macron will beat eurosceptic Marine Le Pen by a comfortable 60/40 margin.
The Australian dollar is rising ahead of the Reserve Bank of Australia’s meeting. At Tuesday’s meeting, the RBA is expected to hold its key rate at 1.50 percent