Forex Today: Focus turns to Powell and US hard data

The US Dollar (USD) reversed earlier losses and edged higher on Wednesday, as investors shifted away from risk-linked assets amid continued optimism around US trade policy. The Greenback’s recovery came despite renewed expectations for Federal Reserve rate cuts later this year, following signs of cooling inflation in April.

Here is what you need to know on Thursday, May 15:

The Dollar Index (DXY) reversed Tuesday’s pullback, revisiting the area beyond the 101.00 hurdle amid further advance in US yields across the curve. Interesting data on the US calendar will feature Retail Sales, Producer Prices, the Philly Fed Manufacturing Index, Industrial and Manufacturing Production, Business Inventories, the NAHB Housing Market Index, as weel as weekly Initial Jobless Claims. In addition, Chief Powel is due ro speak ahead of Barr.

EUR/USD returned to the 1.1170 zone despite hitting weekly highs well north of 1.1200 the figure in response to the initial offered stance in the US Dollar. German Wholesale Prices are due next, followed by the eurozone’s Employment Change and the second estimate of Q1 GDP Growth Rate.

GBP/USD could not sustain a move to multi-day peaks near 1.3360, easing to the 1.3250 zone afterwards amid marked losses. A busy UK docket will include the release of the preliminary Q1 GDP Growth Rate, followed by Business Investment, Goods Trade Balance, Industrial and Manufacturing Production, Construction Output, and Labour Productivity. Additionally, the BoE’s Dhingra is due to speak.

USD/JPY plummeted to the 145.60 zone, or three-day troughs, following the weaker Greenback and higher US and Japanese yields. Foreign Bond Investment and Machine Tool Orders are next on the docket.

AUD/USD briefly revisited the 0.6500 barrier, just to succumb to the selling pressure soon afterwards, ending the day sharply on the defensive. The key labour market report is next in Oz, seconded by Consumer Inflation Expectations.

WTI prices receded modestly but remained close to recent highs in the vicinity of the $64.00 mark per barrel on the back of the increase in US crude oil supplies.

Gold traded well on the defensive, adding to the ongoing weakness and hitting five-week lows near $3,170 per ounce troy, always following steady optimism on the tarde scenario. Silver prices retreated to two-day troughs near the $32.00 mark per ounce amid the persistent choppiness in the price action.