Opening
The Federal Reserve's May meeting delivered the expected hold with a notably balanced statement — fewer hawkish signals than feared, enough to unwind the rate anxiety that had compressed European equities through the month. EUR/USD recovered to 1.1687 before settling near 1.1672 overnight, its highest weekly close since mid-February.
The relief is partial and asymmetric. Gold benefitted most directly — $3,421/oz, up +0.69% — as real yields softened slightly. Crude and industrial metals are less convinced: Brent remained below $103 ahead of the OPEC+ output decision expected mid-June. European equity indices are broadly positive but with low conviction, reflecting a market that has cleared one uncertainty only to face the next: the ECB on June 11.
What moved
- EUR/USD +0.28% to 1.1672: The Fed hold unlocked a modest EUR bid. The week's range was 1.161–1.170 — a tight, orderly range suggesting the market is awaiting the ECB for its next directional move.
- Gold +0.69% at $3,421: Classic relief trade. When real rates ease slightly, gold outperforms. Position data shows hedge funds added length this week — the first net-long addition since March.
- CAC 40 +0.54%: LVMH and Hermès among the leaders as the luxury sector found support from softer dollar. Weak China data remains the structural headwind but did not worsen.
- FTSE 100 flat at -0.05%: Sterling strength (+0.3% vs EUR) offset equity gains. UK Gilts rallied modestly in sympathy with USTs.
What to watch today
Month-end flows: Friday of the final week in May typically sees institutional rebalancing. European equities have underperformed relative to the US and Japan YTD — this could translate to buy-side flows into European names through the session.
Eurozone CPI flash estimate (today, 11:00 CET): April was 2.2% headline, 2.7% core. If May core prints above 2.8%, ECB hawks will have additional ammunition for June 11. Consensus is 2.6% core.
ECB speakers: Multiple council members speak today. Any forward guidance on the June meeting will move EUR/USD.
The number
1.1672 — EUR/USD at the close. Each 0.01 move in EUR/USD represents approximately €1.2bn in annual earnings impact across the DAX 40, primarily through export pricing for industrials and chemicals. A sustained move above 1.18 would begin to pressure German exporter margins meaningfully.