Forex Today: Dollar pares gains but retain gains

FXStreet Team FXStreet

What you need to know on Friday, May 14:

The American currency retained its strength, reaching fresh weekly highs against most major rivals. However, demand for the greenback lost momentum after the release of encouraging US related data. Unemployment claims decreased to 439K in the first week of May, its lowest reading since March 2020.

US Treasury yields retreated, with the yield on the 10-year note hitting 1.70% to then settle at 1.66%. Stocks bounced back, with US indexes closing with substantial gains and trimming most of Wednesday’s losses.

However, producer prices in the US rose by more than anticipated, another sign of heating inflation. All eyes now turn to US Retail Sales, seen contracting by 0.2% MoM in April.

Major pairs closed mixed, not far from their opening levels, with the greenback marginally lower against its European rivals and safe-haven yen. The USD/CAD pair out-stands, as it surged to 1.2202 on the back of falling oil prices. WTI settled at $ 63.70 a barrel. Gold, on the other hand, recovered some ground and finished the day around $ 1,826 a troy ounce.

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EUR/USD onsolidates around mid-1.1800s as traders keenly await FOMC Minutes

The EUR/USD pair struggles to capitalize on the previous day's goodish rebound from the 1.1800 neighborhood, or a one-and-a-half-week low, and consolidates in a narrow band during the Asian session on Wednesday. Spot prices currently trade just below mid-1.1800s, nearly unchanged for the day.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.