Forex Today: Dollar rebounds despite US data, Yen gains amid lower yields

After the ADP and ISM Service PMI, attention turns to Nonfarm Payrolls. Data releases on Thursday include Australian trade, Reserve Bank of Australia Financial Stability Review, Chinese Caixin Service PMI, Canadian employment and US weekly Jobless Claims. Markets can be affected by the Easter holidays. 

Here is what you need to know on Thursday, April 6:

After two days of heavy losses, the US Dollar rose despite dismal US data. On Wednesday, stocks finished mixed on Wall Street, and bonds rallied. The bond market continues to signal recession ahead, but economic figures and equities slow down. 

The US Dollar Index climbed from two-month lows toward 102.00. DXY's trend is still bearish. US and European bond yields fell on Wednesday, with the bond market suggesting a recession. The US 10-year ended at 3.30%, the lowest close since September. 

Data from the US came in below expectations. The ADP Employment report showed an increase in private payrolls of 145K in March, against expectations of 200K. The ISM Service PMI dropped from 55.1 in February to 51.2 in March. On Friday, the US Jobs report is due. 

Lower yields continued to boost the Japanese Yen, which outperformed again. USD/JPY fell for the third day in a row but managed to retake 131.00, amid Dollar's strength during the American session. 

EUR/USD dropped from two-month highs to settle around 1.0900. The rally took a breather amid lower European yields and a deterioration in market sentiment. 

GBP/USD lost ground after trading above 1.2500 for the first time since June 2022; it found support at 1.2430 and trimmed losses. EUR/GBP fell modestly, posting the lowest close since mid-March. The pound outperformed following comments from Bank of England (BoE) Chief Economist Pill about inflation persistence. 

AUD/USD regained levels above 0.6700 after falling to 0.6676, slightly above the 20-day Simple Moving Average. The Aussie received some support from Reserve Bank Governor Philip Lowe. He said that despite the decision to pause the hike cycle, it does not mean tightening is over.  

The New Zealand Dollar was among the best performers on Wednesday, boosted by the surprise of the Reserve Bank of New Zealand (RBNZ). The central bank raised rates by 50 basis points to 5.25%. NZD/USD jumped initially to 0.6379 and then dropped to as low as 0.6282 to rise later to the 0.6330 area. AUD/NZD spiked to 1.0588, the lowest since December, and then rebounded to 1.0640. 

USD/CAD corrected higher for the second consecutive day, rising above 1.3450. However, the bearish trend is intact. Canada will release job market numbers on Thursday. Analysts expected more modest gains in jobs, predicting a 12K increase in payroll in March and a slight increase in the Unemployment Rate to 5.1%. 

The Mexican Peso was the worst performer on Wednesday, with USD/MXN rising above 18.30. Mexico reported a slowdown in annual inflation from 7.62% to 6.85% in March. The Central Bank of India will announce its decision on Thursday. 

Gold price lost momentum and fell to $2,009/oz only to rise back to $2,020, showing that bulls are still in control. Silver continues to consolidate around $25.00. 

Bitcoin ended flat, hovering around $28,250, while Ethereum rose 1.60% to $1,910. 

 

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