Forex Today: Not even risk appetite slows the Dollar

Matías Salord FXStreet

The economic calendar is light on Friday. During the Asian session, New Zealand will report on exports and imports, as well as Credit Card Spending. Japan will release inflation data and the Tertiary Industry Index. Later in Europe, the highlight will be German wholesale inflation. The rally of the US dollar is in focus, and the slide in Gold price also deserves attention.

Here is what you need to know on Friday, May 19:

US stocks had another positive day, with the Dow Jones gaining 0.34% and the Nasdaq jumping 1.51%. Optimism about a debt ceiling deal, as well as upbeat economic data, fueled risk appetite. The US dollar rose across the board, even against high-yielding currencies. The US Dollar Index rose 0.65% to settle at 103.50, its highest level in two months. The dollar looks firm. However, most currency pairs show extreme oversold readings.

Economic data from the US came in above expectations, with Jobless Claims and the Philly Fed. Hawkish comments from Federal Reserve officials and hopes of resolving the debt ceiling drama triggered a selloff in Treasury bonds. The US 10-year yield rose to 3.65%, the highest in two months. Investors continue to pare bets of Fed rate cuts by year-end and consider the possibility of another rate hike in June. More Fed talk is scheduled for Friday, including Chair Powell.

EUR/USD dropped towards 1.0750, falling for the fifth time in the last six trading days. On Friday, Germany will report the Producer Price Index for April. The European Central Bank (ECB) will release its Economic Bulletin, and ECB officials Schanbel and Lagarde will speak.

GBP/USD tumbled, testing levels under 1.2500. EUR/GBP finished flat, around 0.8680, holding weekly losses.

The Japanese Yen was the worst performer, affected by rising government bond yields. USD/JPY advanced for the sixth consecutive day, reaching above 138.50, the highest since November. Inflation data from Japan is due on Friday.

The Australian dollar lagged following the Australian employment data. AUD/USD dropped below 0.6640 and is looking at 0.6600.

NZD/USD held above 0.6200 and posted modest losses after presenting the Budget and wholesale inflation figures. Trade data and Credit Card Spending are due in New Zealand.

USD/CAD rose toward 1.3500 and remains in a familiar range. On Friday, March, retail sales will be released in Canada.

Gold suffered heavy losses after breaking the $1,970 support area, falling to $1,950. The yellow metal remains under pressure. Silver also lost ground, extending weekly losses, with XAG/USD settling at $23.50, the weakest close since late March.

Like this article? Help us with some feedback by answering this survey:

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold holds above $5,000 as bears seem hesitant amid Fed rate cut bets

Gold edges lower at the start of a new week, though it defends the $5,000 psychological mark through the Asian session. The underlying bullish sentiment is seen acting as a headwind for the bullion. However, bets for more rate cuts by the Fed, bolstered by Friday's softer US CPI, keep the US Dollar bulls on the defensive and continue to support the non-yielding yellow metal as the focus now shifts to FOMC Minutes on Wednesday.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.