Forex Today: Busy week starts with EU sentiment and US PMI data

Here is what you need to know on Monday, May 2:

The dollar started the first trading day of May on a firm footing after having weakened against its major rivals on Friday. The cautious market mood helps the greenback find demand early Monday and investors await the consumer and business sentiment data from the euro area. Later in the day, the ISM will release the April Manufacturing PMI data for the US. In the early trading hours of the Asian session on Tuesday, the Reserve Bank of Australia (RBA) will announce its interest rate decision.

Escalating geopolitical tensions and heightened concerns over a slowdown in global economic activity don't allow a risk rally to gather momentum at the beginning of the week.

The European Union (EU) is reportedly planning to phase out Russian oil imports by the end of the year and the Financial Times reported that China had a discussion with banks on how to protect their assets in case the US were to impose sanctions.

Beijing announced Sunday that it will ban all restaurants dining and order residents to provide proof of a negative COVID test to enter public venues. This comes as the nation heads into a five-day holiday season. Meanwhile, the data from China showed over the weekend that the economic activity in the private sector contracted at a stronger pace in April than it did in March.

EUR/USD struggles to build on Friday's gains and trades in negative territory slightly above 1.0500. In an interview with Bloomberg on Sunday, European Central Bank (ECB) Vice President Luis de Guindos said that an ECB rate hike was "possible but not likely" in July.

GBP/USD trades in a relatively tight range around mid-1.2500s after having gained more than 100 pips on Friday. UK markets will be closed due to the Early May holiday on Monday.

USD/JPY edged lower toward 130.00 in the early Asian session but started to push higher in the European morning. The benchmark 10-year US Treasury bond yield is clinging to small gains near 2.95%.

Gold is pushing lower and trading below $1,890, pressured by the coronavirus-related lockdowns in China. 

Bitcoin struggled to make a decisive move in either direction during the weekend and was last seen fluctuating near $39,000. Ethereum rose nearly 4% on Sunday but continues to trade below the key $3,000 level early Monday.