Forex Today: US Dollar finds a foothold ahead of PPI, consumer sentiment data

Eren Sengezer FXStreet

Here is what you need to know on Friday, February 16:

The US Dollar (USD) extended its downward correction following mixed data releases on Thursday, with the USD Index (DXY) losing 0.4% on the day. The USD stays resilient against its rivals early Friday as focus shifts to January Producer Price Index (PPI) data. Later in the American session, the University of Michigan will release the preliminary Consumer Sentiment Index for February.

The US Census Bureau reported on Thursday that Retail Sales declined 0.8% on a monthly basis in January. On a positive note, weekly Initial Jobless Claims came in at 212,000 for the week ending February 10, down from 220,000 in the previous week. The benchmark 10-year US Treasury bond yield retreated toward 4.2% and Wall Street's main indexes registered modest gains after the data, not allowing the USD to gather strength. In the European morning, the 10-year yield stays in positive territory near 4.25% and US stock index futures trade mixed.

Retail Sales in the UK rose 3.4% on a monthly basis in January, the UK's Office for National Statistics announced early Friday. This print surpassed the market expectation for an increase of 1.5% by a wife margin. Retail Sales ex-Fuel grew 3.2% in the same period. Pound Sterling failed to benefit from the upbeat data and GBP/USD was last seen fluctuating at around 1.2600.

Bank of Japan (BoJ) Governor Kazuo Ueda said on Friday that they will examine whether to maintain various easing measures, including negative interest rate, when a sustained and stable achievement of the price target comes into sight. Ueda refrained from commenting on the short-term fluctuations in the forex markets and possible factors behind such moves. After closing the previous two trading days in negative territory, USD/JPY stabilized near 150.00 and edged higher during the Asian trading hours.

Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr repeated early Friday that they have more work to do to get inflation expectations anchored to the 2% target. "Bringing core inflation down to within the 1-2% target band is an important part of bringing overall inflation down to the 2% target," Orr added. NZD/USD largely ignored these comments and was last seen trading marginally lower on the day at around 0.6100.

EUR/USD gathered recovery momentum and climbed above 1.0750 on Thursday. The pair holds steady above this level in the European morning on Friday.

Gold snapped a five-day losing streak on Thursday and closed above the key $2,000 mark. XAU/USD trades in a narrow channel slightly above this level on the last trading day of the week.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold keeps the bid tone in place; still below $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains just below the $4,400 mark per troy ounce on Friday. The precious metal’s advance finds traction in declining crude oil prices and fresh selling pressure on the US Dollar.

Why altcoin season isn't coming back — and what stole its capital

If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.

BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.