While delivering his prepared remarks on Framework Review at the Thomas Laubach Research Conference on Thursday, Federal Reserve (Fed) Chairman Jerome Powell said that officials agree that the strategic language around both shortfalls of employment and average inflation needs to be reconsidered.
Retail Sales in the United States (US) rose by 0.1% in April to $724.1 billion, the US Census Bureau announced on Thursday. This reading followed the 1.5% increase (revised from 1.4%) recorded in March and came in slightly better than the market expectation for a no change.
US citizens filing new applications for unemployment insurance held steady at 229K for the week ending May 10, as reported by the US Department of Labor (DOL) on Thursday. This print matched initial estimates and the previous week's revised tally of 229K (revised from 228K).
The Producer Price Index (PPI) for final demand in the US rose 2.4% on a yearly basis in April, the data published by the US Bureau of Labor Statistics showed on Thursday. This reading followed the 2.7% increase recorded in March and came in below the market expectation of 2.5%.
Mexican Peso (MXN) is weakening against the US Dollar (USD) during the US session on Thursday, as traders recalibrate expectations around monetary policy in both countries ahead of a key rate decision from the Bank of Mexico (Banxico).
Euro (EUR) is entering Thursday’s NA session with a modest 0.2% gain vs. the USD, showing losses vs. the havens while strengthening vs. the likes of AUD and NOK in a market that is trading on the disinflationary impact of a US/Iran deal, Scotiabank's Chief FX Strategist Shaun Osborne notes.
The CAD is entering Thursday’s NA session flat vs. the USD but trading somewhat defensively, reflecting the burden of lower oil prices amid the prospect of a possible US/Iran deal, Scotiabank's Chief FX Strategist Shaun Osborne notes.
Risk aversion is dominating as we head into Thursday’s NA session with a distribution of relative currency performance that is seeing notable strength from the havens Swiss Franc (CHF) and Japanese Yen (JPY) and weakness from the growth-sensitive commodity currencies NOK, NZD, and AUD.
The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, is catching its breath and trades slightly lower just below the 101.00 level at the time of writing on Thursday, ahead of a chunky United States (US) economic calendar.
The Australian Dollar (AUD) edges lower, retreating to near 0.6400 against the US Dollar (USD) at the time of writing on Thursday, erasing early Asian session gains following a stellar Australian jobs report.
Further sideways trading seems likely; firmer underlying tone suggests a higher range of 7.1950/7.2200. In the longer run, renewed downward momentum suggests 7.1700 is back in sight, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Gold has continued to trade with a heavy bearish bias as tariff de-escalation momentum gained pace, while Fed cut expectations was scaled back in terms of the timing of next cut and quantum. Gold was last at 3174.52 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
USD is likely to trade in a sideways range of 145.70/147.50. In the longer run, upward momentum has dissipated; USD is expected to consolidate in a range of 144.50/148.50 for now, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
When news agencies yesterday announced that officials from the South Korean Ministry of Finance and the US Treasury Department had discussed exchange rates on the sidelines of a meeting in Milan, Korea's currency, the won, took a big leap. But it wasn't the only one.
Silver price (XAG/USD) bounces back to near $32.00 during European trading hours on Thursday after sliding to near the monthly low around $31.65 earlier in the day. The outlook of the Silver price remains bearish as trade relations between the United States (US) and China have improved further.
New Zealand Dollar (NZD) could decline vs US Dollar (USD), but as there is no significant increase in momentum, it is unlikely to be able to break clearly below 0.5860.
There was quite a bit of volatility in FX markets overnight, with USD declining at first, in response to the Bloomberg headline that US discussed FX with South Korea. DXY was last at 100.77 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
A slight increase in downward momentum is likely to lead to a lower range of 0.6400/0.6465 instead of a sustained decline. In the longer run, to continue to rise, Australian Dollar (AUD) must break and hold above 0.6515, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
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