Forex Today: Dollar extends rebound, eyes on EU inflation, US jobs data

Eren Sengezer FXStreet

Here is what you need to know on Friday, April 1:

The negative shift witnessed in risk sentiment amid escalating geopolitical tensions helped the greenback gather strength against its rivals on Thursday. The US Dollar Index continues to push higher early Friday as focus shifts to inflation data from the euro area and the US March jobs report. The US economic docket will also feature the ISM's Manufacturing PMI survey. Market participants will continue to keep a close eye on developments surrounding the Russia-Ukraine conflict ahead of the weekend.

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Russian President Vladimir Putin announced on Thursday that buyers of Russian gas "must open rouble accounts in Russian banks" to execute purchases from April 1. "If such payments are not made, we will consider this a default on the part of buyers, with all the ensuing consequences," warned Putin in a televised speech. Following this development, Russia's foreign ministry said that they will respond if the European Union were to impose sanctions.

In the meantime, the US announced late Thursday that they have decided to impose additional sanctions targeting the Russian technology sector. Wall Street's three main indexes lost more than 1% on Thursday but US stock index futures are trading flat early Friday.

Crude oil prices fell sharply on Thursday following the OPEC meeting and the US' decision to release strategic oil reserves to ease pressures on energy prices. Later in the day, the International Energy Agency (IEA) will hold an emergency meeting to discuss a possible release of its strategic reserves. The barrel of West Texas Intermediate (WTI), which fell nearly 6% on Thursday, was last seen losing nearly 2% on the day at $99.20.

OPEC+ agrees on 432K BPD output quota hike in May as expected, next meeting to be held on May 5.

EUR/USD lost more than 100 pips on Thursday and stays on the back foot near 1.1050 early Friday. Inflation in the euro area, as measured by the Harmonised Index of Consumer Prices (HICP) is expected to rise to 6.6% on a yearly basis in March from 5.9% in February.

GBP/USD closed virtually unchanged on Thursday and continues to move sideways above 1.3100 in the European morning.

Gold advanced toward $1,950 on Thursday but erased a large portion of its daily gains before closing below $1,940. XAU/USD stays under modest bearish pressure on Friday with the benchmark 10-year US Treasury bond yield staging a rebound following a three-day drop.

US March Nonfarm Payrolls Preview: Analyzing gold's reaction to NFP surprises.

USD/JPY reversed its direction and rose toward 122.50 on Friday after closing the previous three days deep in negative territory.

Bitcoin fell sharply amid risk aversion on Thursday and extended its slide early Friday. BTC/USD was last seen losing more than 1% on the day below $45,000. Ethereum lost 3% on Thursday and continues to edge lower toward $3,200.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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