The US dollar eases after disappointing Q1 GDP slowdown

The Australian dollar rose against the US dollar and the kiwi after the country released better-than-expected first-quarter inflation numbers. The data showed that the headline CPI rose by an annual rate of 2.2%, which was the fastest growth since 2014. The CPI rose by 0.3% in the first quarter. Meanwhile, the trimmed mean rose at an annualised pace of 1.8% while the weighted mean CPI rose by 1.7%. The trimmed CPI excludes the volatile 30% of items while the weighted mean is calculated by using the quarterly price changes of all components. The Australian dollar has risen to the highest level since March 11.

The US dollar index was little changed today as the market received the first-quarter GDP numbers. The data showed that the economy dropped by 4.8% in the quarter. This was slightly worse than the expected decline of 4%. It was also the first contraction since the last financial crisis. Real consumer spending declined by 7.6% while the GDP sales declined by 4.4%. The focus now shifts to the Federal Reserve, which will release its interest rates decision later today. The bank is expected to leave rates unchanged and provide more guidelines on how it intends to support the economy. 

The price of crude oil rose today as more countries started to reopen their economies. In the United States, more states have started to make reopening plans. The same trend is happening in Europe, Australia, and China. The market also reacted to positive data from the American Petroleum Institute (API) that showed that crude oil stocks rose by 10 million barrels. This was 3 million lower than what it released last week. Still, this number tends to differ significantly with the official government data that will be released later today.

XBR/USD

The XBR/USD pair rose slightly to an intraday high of 23.86, which is the highest it has been since Monday this week. As the price rose, it moved above the yellow trendline and is currently forming a bearish pennant pattern. This means that the pair may resume the downward trend possibly after the EIA releases the inventories data later today. A decline will be confirmed if the pair moves below the 50-day EMA at 23.40.

AUD/USD

The AUD/USD pair rallied today and reached an intraday high of 0.6550. This was the highest level in more than 6 weeks. The price is above the short and medium-term moving averages on the hourly chart. On the hourly chart, the pair has formed a bearish Doji candlestick pattern. This means that the pair could have a pullback as bears attempt to retest the 23.6% retracement at 0.6400.

EUR/USD

The EUR/USD pair rose slightly after the weak Q1 GDP data. On the hourly chart, the price is above the short and medium-term moving averages. The pair is also along the 50% Fibonacci retracement level. Also, the RSI has remained slightly below the overbought level. The pair may continue rising ahead of the FOMC decision during the American session.