Talking Points:
- US Dollar Index gains on EUR and GBP weakness
- Tomorrow’s data may change the course of greenback trading
A look back at the past 24 hours of Forex trading using movements in the US Dollar Index:
US Dollar 15-Minute 12:00 04/28 to 12:00 04/29 EST
The Dow Jones FXCM Dollar Index found some strength in the middle of Tuesday’s London session on a combination of weaker than expected data out of Germany and the United Kingdom.
The US Dollar gained over 40 pips against the British Pound after the release of UK GDP for the first quarter. The United Kingdom economy expanded by 0.8% in Q1, disappointing expectations for 0.9% growth.
The greenback went on to take another 45 pips of gains against the Euro as New York traders came online. German inflation set a 3-month high in April, but still fell short of expectations. The ECB has warned that it may purchase assets if a slowdown in price gains hurts the Euro-zone recovery.
The Dollar set a new 3-day high at 10,478 after the German CPI release, and the index may continue to see volatility in tomorrow’s busy US economic calendar. Chief Strategist John Kicklighter says tomorrow’s events may not only alter expectations for US Dollar trading but also the direction of risk trends.
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EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
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