Forex Today: Dollar loses momentum as yields ease

FXStreet Team FXStreet

What you need to know on Wednesday, April 7:

The greenback seesawed between gains and losses throughout the first half of the day but resumed its decline during US trading hours. Weakening US Treasury yields weighed on the greenback as the yield on the benchmark 10-year Treasury note fell to 1.65%.

The EUR/USD pair advanced to 1.1870, its highest in two weeks. The pound lagged, unexpectedly falling against the greenback towards the 1.3810 region after hovering around 1.3900 at the beginning of the day.

The aussie advanced against its American rival, but the Canadian dollar remained pressured. Gold moved further higher, settling above $ 1,740 a troy ounce, while crude oil prices eased after the US Energy Information Administration raised the forecast for 2021 world oil demand growth by 180,000 barrels per day (bpd) to 5.5 million bpd. For 2022, the EIA lowered its forecast for world oil demand growth by 180,000 bpd to 3.65 million bpd.

USD/JPY and USD/CHF edged lower, undermined by falling government bond yields.

The International Monetary Fund upgraded its global economic growth forecast to 6.0% from 5.5% in January but warned about widening inequality and a divergence between advanced and developing economies.

The head of the European Medicines Agency’s vaccines strategy said there is a link between the AstraZeneca coronavirus vaccine and rare blood clots, but reiterated that the benefits of the shot in protecting against the coronavirus outweigh any risks. Later in the day, the agency denied having found a causal link and said that the review is ongoing.

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EUR/USD struggles near 1.1850, with all eyes on US CPI data

EUR/USD holds losses while keeping its range near 1.1850 in European trading on Friday. A broadly cautious market environment paired with a steady US Dollar undermines the pair ahead of the critical US CPI data. Meanwhile, the Eurozone Q4 GDP second estimate has little to no impact on the Euro.

GBP/USD recoers above 1.3600, awaits US CPI for fresh impetus

GBP/USD recovers some ground above 1.3600 in the European session on Friday, though it lacks bullish conviction. The US Dollar remains supported amid a softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold remains below $5,000 as US inflation report looms

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains in the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.