US Dollar Index

Last week, the US Dollar Index remained weak around 104.50, ending the week with a decline. Despite hawkish comments from several Federal Reserve officials supporting the dollar before this week's FOMC minutes, expectations of rate cuts have increased due to slowing US Consumer Price Index (CPI) inflation. This has led to a weaker dollar. The index experienced significant pressure after the US CPI report indicated a slowdown in inflation to 3.4% year-over-year in April, in line with expectations, down from 3.50% in March. Additionally, US Producer Price Index (PPI) data for April exceeded expectations, rising 2.2% year-over-year. However, due to key support around 104, dip buyers are utilizing trendline trading strategies, viewing recent pullbacks as buying opportunities.

Gold

Gold prices initially fell but then rebounded to close at $2,414, briefly touching $2,422 before the weekend. The bullish trend in gold remains intact, with momentum favoring further gains. There is a strong possibility that gold could test its historical high of $2,431, with the next target being the psychological level of $2,500. The gold/silver ratio fell to 78.00, marking a significant shift from the high of 31.598 seen in February 2013. Silver also strengthened last week.

Bitcoin

Bitcoin experienced a significant rally, surpassing $67,000. The weaker US CPI data has intensified rate cut expectations, indirectly benefiting Bitcoin. Bitcoin's liquidity above $67,000 remains robust, with total liquidity around $75 million. This pattern appears similar to the early 2024 rally, when Bitcoin rose by over 60% after meeting Ichimoku requirements.

Crude Oil

Global economic indicators from the two largest oil-consuming countries improved last week, leading to increased expectations for crude oil demand. Consequently, crude oil prices rose, marking the third weekly increase in four weeks. WTI crude oil closed up 2.13% at $79.38 per barrel, while Brent crude oil rose approximately 1%, currently trading at $83.94 per barrel, up 0.80%.

US Stock Market

The US stock market closed with mixed results last week. The Dow Jones Industrial Average closed above the 40,000-point mark for the first time, fueled by renewed investor hopes for Fed rate cuts following a series of inflation reports. All three major indices recorded gains for the fourth consecutive week. The Dow closed at 40,003.59 points, the S&P 500 at 5,304.88 points, and the Nasdaq Composite Index fell to 16,685.97 points.

China

To rescue the struggling Chinese real estate market, the Chinese government has relaxed mortgage rules and urged local governments to purchase unsold homes. This action reflects growing concerns about the sector's drag on economic growth. China's economic recovery is increasingly skewed towards manufacturing, making it more vulnerable to trade barriers and highlighting the stakes of boosting domestic demand. The National Bureau of Statistics reported that consumer spending growth unexpectedly slowed to 2.3% in April, the slowest since 2022, while industrial output rose to 6.7%, faster than expected.

**Weekly Outlook:**

Overview

This week, the forex market will be influenced by a series of important economic data and events. Rate decisions from the central banks of New Zealand, South Korea, and Indonesia, as well as meeting minutes from the Federal Reserve and the Reserve Bank of Australia, will be in focus. Additionally, CPI and PPI data from multiple countries will be key in the global fight against inflation.

 Key Data and Events

- **May 22**: Weekly mortgage applications, existing home sales, and FOMC meeting minutes.

- **May 23**: Weekly initial jobless claims, Chicago Fed National Activity Index, new home sales, and preliminary manufacturing and services PMI.

- **May 24**: Durable goods orders and final Michigan Consumer Sentiment Index.

EUR/USD

EUR/USD maintained a strong uptrend last week, marking the fifth consecutive week of gains and hovering around the critical 1.0900 level. Key data this week includes:

- **May 20**: German PPI.

- **May 21**: Eurozone trade balance.

- **May 23**: German and Eurozone manufacturing and services PMI, Eurozone consumer confidence.

- **May 24**: German Q1 GDP final data.

 GBP/USD

GBP/USD broke above the 1.2700 mark for the first time since mid-March. Key data this week includes:

- **May 21**: CBI industrial trends orders.

- **May 22**: Inflation rate and public sector net borrowing.

- **May 23**: Preliminary manufacturing and services PMI.

- **May 24**: Retail sales and GfK consumer confidence.

USD/JPY

USD/JPY ended the week near 155.50 with volatile trading. Key data this week includes:

- **May 20**: Tertiary industry index.

- **May 22**: Reuters Tankan index, trade balance, and machinery orders.

- **May 23**: Weekly foreign bond investment and preliminary manufacturing and services PMI.

- **May 24**: Inflation rate.

AUD/USD

AUD/USD resumed its upward trend, closing the week with significant gains and successfully breaking above the 0.6700 level before pulling back. Key data this week includes:

- **May 21**: Westpac consumer confidence index and RBA meeting minutes.

- **May 23**: Judo Bank manufacturing and services PMI flash and consumer inflation expectations.

Important Events and Economic Data (Beijing Time)

- **Monday, May 20**:

  - Fed Chair Powell speaks at Georgetown University Law Center's commencement.

- **Tuesday, May 21**:

  - US Treasury Secretary Yellen, ECB President Lagarde, and German Finance Minister Lindner speak; Fed Governor Waller speaks on the US economy.

- **Wednesday, May 22**:

  - BoE Governor Bailey speaks at the London School of Economics; RBNZ Governor Orr holds a press conference on monetary policy; RBNZ rate decision and policy statement.

- **Thursday, May 23**:

  - Fed releases FOMC meeting minutes; G7 finance ministers and central bank governors meet.

- **Friday, May 24**:

  - Fed Governor Waller speaks.

### Economic Data Overview

- **Monday, May 20**:

  - China: May 1-year loan prime rate; Germany: April PPI; UK: May CBI retail sales balance.

- **Tuesday, May 21**:

  - Australia: ANZ-Roy Morgan consumer confidence; Eurozone: March adjusted trade balance; Canada: April CPI and core CPI.

- **Wednesday, May 22**:

  - New Zealand: Official cash rate decision; UK: April CPI, retail price index, and input PPI; US: April existing home sales, weekly EIA crude oil stocks.

- **Thursday, May 23**:

  - Eurozone: May SPGI manufacturing PMI flash; UK: May SPGI services PMI flash; US: April building permits revision, weekly continuing jobless claims, May SPGI manufacturing PMI flash, Eurozone May consumer confidence flash, US April new home sales.

- **Friday, May 24**:

  - UK: May GfK consumer confidence; Japan: April national CPI; UK: April retail sales; US: April durable goods orders preliminary; Canada: March retail sales; US: May final Michigan Consumer Sentiment Index.