Forex Today: Central banks return to the fore

A data-driven sell-off prompted the USD Index (DXY) to give away part of its recent advance amidst lower yields across the curve. The BoE kept rates unchanged and opened the door to a rate cut sooner than anticipated, reinforcing the policy divergence between the Fed and its G10 peers.

Here is what you need to know on Friday, May 10:

The USD Index (DXY) corrected lower and set aside three daily advances in a row against the backdrop of diminishing yields. On May 10, the preliminary Michigan Consumer Sentiment will take centre stage along with speeches by Fed’s Bowman, Goolsbee and Barr.

EUR/USD regained some balance along with the better tone in the broader risk-linked space. The ECB will publish its Accounts of the April meeting on May 10.

GBP/USD charted modest gains beyond 1.2500 the figure after the BoE’s dovish hold sent the pair to fresh lows near 1.2440. A busy UK calendar will show GDP figures on May 10 seconded by Industrial and Manufacturing Production, Construction Output, Balance of Trade, the NIESR Monthly GDP Tracker and the speech by BoE’s Pill.

USD/JPY navigated an irresolute range around 155.50, maintaining its weekly positive performance well and sound. On May 10, Household Spending is due followed by Bank Lending, Foreign Bond Investment and the Eco Watchers Survey.

AUD/USD set aside a two-session negative streak and reclaimed the area above the 0.6600 hurdle amidst the generalized improvement in the risk complex. The next data release in Australia will be the Wage Price Index on May 15.

Prices of WTI dropped slightly after the move to the vicinity of the $80.00 mark per barrel lacked follow through.

Prices of Gold rose markedly to multi-day highs near the $2,340 area on the back of the weaker dollar and lower US yields. Silver followed suit and went up more than 3% past the $28.00 mark per ounce, or two-week highs.