Slow movements in the market graced early trading in the week, as the American dollar began to retreat from a 20 -year high it reached last week by posting modest losses.
At the time of writing, the dollar index is trading slightly lower at 104.10 against a basket of other major currencies.
The depreciation of the US dollar has opened up opportunities for its other major rivals for a slight rise. However, the movements displayed by major currencies are limited causing them to remain hovering around the lows.
Market sentiment is essentially still gloomy, moreover Chinese economic data published on Monday added to concerns over global economic growth.
Data on Chinese retail sales and manufacturing activity fell sharply in April as a tight closure of Covid-19 has restrained consumers from spending while workers are at home.
Overall, the direction of the currency market remains unclear which may be due to investors awaiting the release of US retail sales data and Federal Reserve Chairman Jerome Powell’s speech on Tuesday.
Also in focus is UK inflation data on Wednesday which will determine the next action of the Bank of England (BOE). Consumer prices in Britain are expected to jump higher reaching 9.1% in April from 7.0% recorded the previous month.
At the time of writing, the pound is trading higher but remains around its lowest level since June 2020, while the euro is also slightly higher but still weak at a 5 -year low against the USD.
