Global Forex Market

FILE - This Wednesday, April 3, 2019, file photo shows a box filled with dollar bills, in New York. A growing number of businesses and individuals worldwide have stopped using banknotes in fear that physical currency, handled by tens of thousands of people over their useful life, could be a vector for the spreading coronavirus.(AP Photo/Mark Lennihan, File)

AMID a short working week due to Memorial Day, the US dollar witnessed a sell-off, losing 1.48% to 98.38, underpinned by global risk-on sentiment – which led to robust buying in the equity space with the Dow Jones rising 3.8% week-on-week (w/w) to 25,401 while the S&P 500 climbing 2.5% w/w to 3,030. The growing optimism among investors was supported by the reopening of the world economy added with expectations that authorities may offer more stimulus to bolster the recovery. These have superseded the tension between the US and China.

Nevertheless, economic release during the week was rather mixed: (1) 1Q20 GDP second estimation dipped further into the contraction region at -5% quarter-on-quarter (q/q) from 2.1% q/q in 4Q19 (cons: -4.8% q/q); (2) April’s durable goods orders fell further to -17.2% month-on-month (m/m) from -16.6% m/m in March (cons: -19% m/m); (3) jobless claims registered at 2.1mil for the week ending 23 May from 2.4mil in the previous week (cons: 2.1mil); and (4) April new home sales rose 0.6% m/m from -13.7% m/m in March (cons: -21.9%).