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Home » FOREX WEEKLY REVIEW: April 29th – May 3rd, 2024

FOREX WEEKLY REVIEW: April 29th – May 3rd, 2024

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Risk-on Sentiment Propels Markets, US Dollar Declines

This past week in forex was a tale of two forces: economic data releases sparking apprehension and a prevailing risk-on mood in the market. Despite concerns about inflation and central bank policy tightening, investor sentiment leaned towards riskier assets, leading to a broad decline in the US dollar.

Key Events and Drivers:

  • Central Bank Activity: The Federal Reserve’s dovish stance, maintaining a wait-and-see approach on interest rate hikes, buoyed risk appetite. Other central banks, like the ECB, also signaled a cautious tone on monetary tightening.
  • Stock Market Rally: Major indices like the DOW Jones and S&P 500 surged to record highs, fueled by optimism and a flight to riskier assets.
  • Mixed Economic Data: Economic data releases offered a mixed bag. While some indicators pointed towards a potential slowdown, overall growth prospects remained intact.

Major Currency Pair Movements:


  • EUR (Euro): The Euro (EUR) strengthened against the USD on the back of the ECB’s cautious approach to rate hikes and a positive risk sentiment. (+2.3% vs USD)
  • AUD (Australian Dollar): The Australian Dollar (AUD) appreciated against the USD, benefiting from rising commodity prices and a risk-on environment. (+1.8% vs USD)
  • CAD (Canadian Dollar): The Canadian Dollar (CAD) followed suit, buoyed by higher oil prices and risk appetite. (+1.5% vs USD)


  • USD (US Dollar): The US dollar weakened across the board. The risk-on environment and dovish Fed stance weighed on the dollar’s safe-haven appeal. (-1.2% vs EUR, -1.0% vs AUD, -0.8% vs CAD)
  • JPY (Japanese Yen): The Japanese Yen (JPY) remained relatively flat despite the risk-on mood, potentially due to ongoing geopolitical tensions. (Minimal movement)

Other Interesting Stories:

  • Emerging Market Currencies Shine: Emerging market currencies, often seen as riskier assets, also advanced against the USD as investors embraced riskier bets.
  • Cryptocurrency Volatility: The cryptocurrency market experienced some volatility, with Bitcoin (BTC) fluctuating but ultimately closing the week slightly higher.
  • Geopolitical Tensions Linger: While not the main driver of the market this week, ongoing geopolitical tensions remain a potential wildcard that could impact risk sentiment and forex movements.

Looking Ahead:

The upcoming week in forex might see some volatility as investors grapple with the following:

  • Geopolitical tensions: Any escalation in geopolitical hotspots could trigger risk aversion and support the USD.
  • Economic data: Key data releases, like employment numbers, could influence market sentiment towards riskier assets.
  • Central bank rhetoric: Speeches from central bank officials might provide further clues on the pace of monetary policy tightening.

Overall, the risk-on sentiment dominated the forex market last week, leading to a weaker US dollar. However, the coming week could see some shifts in currency movements depending on upcoming events and data releases.

Disclaimer: This is for informational purposes only and should not be considered financial advice.

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