Forex Today: Dollar pares gains, stocks rise, Bitcoin battered ahead of critical US consumer data

Yohay Elam FXStreet

Here is what you need to know on Friday, May 14:

Markets remain in a positive mood despite growing inflation concerns. US retail sales and consumer sentiment figures are trigger volatility. Bitcoin remains on the back foot while Doge receives a boost from Tesla's Musk. Coronavirus headlines are also eyed.

The US Producer Price Index rose in April by 0.6% monthly, more than expected, and Core PPI also shot higher. Thursday's factory gates data came after Wednesday's consumer figures also beat estimates and sent markets spiraling. However, stocks rebounded on Thursday and the mood remains upbeat on Friday, despite additional signs of wage increases coming from Amazon and MacDonalds. Weekly jobless claims extended their drop, falling to 473,000.

The upbeat mood has been weighing on the dollar, allowing EUR/USD to stabilize just under 1.21. and GBP/USD around 1.4050. Gold has also found its feet around $1,820.

Retail sales for April are in the spotlight on Friday, with moderate increases on the cards after consumption leaped by 9.8% in March. Investors will be eyeing the Control Group, the "core of the core."

US April Retail Sales Preview: Inflation dynamics to drive USD valuation

Later in the day, the University of Michigan's preliminary Consumer Sentiment Index gauge for May is set to rise from April's 88.3 points, yet remain below pre-pandemic levels. The inflation expectations' components are eyed.

US Michigan Consumer Sentiment May Preview: Jobs are plentiful, inflation is the worry

Middle-East: The violence between Israel and the Palestinians in Gaza has been escalating, with growing fears of a ground conflict. Nevertheless, WTI Crude Oil is changing hands at around $63, below the highs.

COVID-19: The US Center for Disease Control announced that fully immunized people can abandon face masks and social distancing, an easing that may encourage more Americans to take up the vaccine. The pace has been slowing of late.

Britain is considering accelerating the administration of second doses amid worries that the variant coming from India is spreading quickly in the UK. Over half the population received one dose but only roughly a quarter got two doses. These new worries have cast doubt on the country's reopening.

Bitcoin is trading under $50,000, licking its wounds from the news that Binance, a major cryptocurrency exchange, is under investigation by US authorities. The news came after Elon Musk's Tesla said it would discontinue accepting Bitcoin as a means of payment for its electric cars.

On the other hand, DogeCoin has resumed its gains after Musk said he may try to assist developers of the dog-themed digital coin. Ethereum is under $4,000 and XRP below $1.40.

More Inflation and the dollar: Is the connection as direct as it seems?

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.