Forex Today: Mixed markets limit Dollar’s slide, attention turns to global PMIs

Global manufacturing and services PMI data will be released Friday. The S&P Global PMIs will be watched closely by market participants and could have a considerable impact on risk sentiment. Could the US Dollar benefit from downbeat numbers? 

Here is what you need to know on Friday, April 21:

The US Dollar continued to move mostly sideways. Weaker-than-expected US economic data weighed on the Greenback that later benefited from a decline in equity prices on Wall Street. The Dow Jones lost 110 points or 0.33%, and the Nasdaq fell 0.80%. US Treasury yields pulled back from weekly highs, with the 10-year yield settling at 3.53%, the lowest in three days. 

US S&P Global PMIs Preview: Win-win situation for the Dollar? Why investors may get spooked

The US Labor Department informed Initial Jobless Claims rose to 245K in the week ended April 15, while Continuing Claims increased by 61K in the week ended April 8 to 1.865 million, the highest since November 2021. A different report showed that manufacturing activity in the Philadelphia area unexpectedly contracted in April. The Philly Fed dropped to -31.3 from 23.2 in March, against expectations of an increase to -19.2. Existing Home Sales dropped to 4.44 million (annual rate) against expectations of 4.5 million. 

The accounts of the European Central Bank (ECB) March meeting showed that had it not been for the banking crisis, the central bank would have signaled determination to more tightening ahead. The ECB looks set to raise rates further in May, but the size remains open. EUR/USD approached 1.1000 and then pulled back to the 1.0950 zone as the pair continues to move sideways. On Friday, the critical report is the Eurozone S&P Global PMI. Many ECB officials will speak. 

GBP/USD posted another daily close near 1.2440 as it remains supported by the 20-day Simple Moving Average. The pair continues to consolidate, unable to retake 1.2500. The UK will report Retail Sales on Friday. 

USD/JPY traded near 135.00 but then turned to the downside, hitting 134.00 amid lower government bond yields across the globe. Next week, the Bank of Japan (BoJ) will have its first monetary policy meeting under Governor Ueda. The recent banking crisis and comments from the new governor eased expectations of changes to the monetary policy stance. Japan releases inflation data. 

The Kiwi was among the worst performers on Thursday hit by New Zealand inflation data. The Consumer Price Index (CPI) grew by 6.7% in the first quarter, against expectations of 6.9%, the lowest since the fourth quarter 2021. At the last meeting, the Reserve Bank of New Zealand (RBNZ) increased the OCR rate by 50 basis points, surprising on the hawkish side.

NZD/USD bottomed at 0.6148, a one-month low, and then recovered toward 0.6200 boosted by a weaker US Dollar. EUR/NZD reached the highest level since October 2020 above 1.7800, while AUD/NZD broke above 1.0900 for the first time since February. 

The Australian Dollar outperformed on Thursday. AUD/USD reached a six-day high at the 0.6770 resistance area and pulled back. The short-term bias is up, without much conviction. An improvement in risk sentiment could help the pair. 

USD/CAD continued to move higher and reached weekly highs at 1.3489 before trimming gains. A bearish correction is on the table unless the pair surpasses the 20-day SMA at 1.3487 and the 1.3500 mark. Canadian Retail Sales numbers are due on Friday. 

Gold rose supported by lower yields, climbing above $2,000/oz. Silver moved sideways around $25. Bitcoin tumbled more than 3% again. BTC/USD stands at $28,250, still looking under pressure. Concerns about a recession weighed further on crude oil prices, which dropped by more than 2%. WTI slid toward $77.00, hitting the lowest since late March.