EUR/USD moves sideways in consolidaiton with a focus on US data

EUR/USD is flat in Tokyo Friday session, so far, and has traveled within a tight range and between a low of 1.0961 and a high of 1.0973. 

The driver has been in the US Dollar that has been thrown around amid US data and Federal Reserve sentiment his week, although is still on track for its first weekly gain in more than a month. At the time of writing, as measured by the DXY index, the Greenback is trading around 101.80 and up from Friday´s lows of 100.78. However, the greenback suffered a blow from a deterioration in economic data on Thursday. 

Analysts at ANZ Bank dug deep:

´´The April Philadelphia Fed index slipped further to -31.3 vs -23.2. That marked the 8th consecutive negative print, reflecting the weakness also observed in the ISM survey. Inflation metrics showed further easing, consistent with the PPI. Prices received fell to -3.3 vs 7.9, and prices paid fell to 8.2 vs 23.5. Input prices and firms’ pricing power in the goods sector are waning.´´

´´US initial claims: The 245k rise in initial claims for the week ended 15 April compares with 247k in the survey week for March and hints at a solid labour market report this month within the context of decelerating hiring.´´

´´Beige Book: The Fed’s qualitative survey of business activity noted a loss in economic momentum following the banking stress in March as consumer spending was reported to be generally flat and manufacturing activity was flat to down. Those sectors together account for ~85% of economic activity.´´

Meanwhile, and more broadly, analysts at Rabobank recently explained that, ´´for now, however, it remains that the USD remains the most widely used invoicing currency.´´

´´This is the crux of the greenback’s safe-haven character,´´ the analysts said.

´´On any further signs of crisis this year the USD is likely to rally.  Risk appetite has settled down in April as the market puts distance between itself and the March banking tremors.

´Signs of stronger growth in China will also likely appease market nerves. That said, we see risks of further bumps in the road and expect dips as far as EUR/USD1.06 before the end of the year,´´ the analysts argued.