Forex Today: US Dollar loses recovery momentum, eyes on PMI surveys

Here is what you need to know on Thursday, May 23:

The US Dollar (USD) Index seems to have entered a consolidation phase early Thursday after climbing to a weekly high near 105.00 on Wednesday. S&P Global will release preliminary May Manufacturing and Services PMI reports for Germany, the Eurozone, the UK and the US later in the day. The US economic docket will also feature weekly Initial Jobless Claims and April New Home Sales data.

US Dollar PRICE This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.

USD   0.41% -0.17% 0.66% 0.48% 1.08% 0.36% 0.67%
EUR -0.41%   -0.61% 0.31% 0.08% 0.70% -0.04% 0.26%
GBP 0.17% 0.61%   0.76% 0.69% 1.31% 0.55% 0.86%
JPY -0.66% -0.31% -0.76%   -0.19% 0.43% -0.28% 0.02%
CAD -0.48% -0.08% -0.69% 0.19%   0.55% -0.12% 0.18%
AUD -1.08% -0.70% -1.31% -0.43% -0.55%   -0.75% -0.42%
NZD -0.36% 0.04% -0.55% 0.28% 0.12% 0.75%   0.31%
CHF -0.67% -0.26% -0.86% -0.02% -0.18% 0.42% -0.31%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The negative shift seen in risk mood helped the USD stay resilient against its rivals in the American session on Wednesday. The minutes of the Federal Reserve's (Fed) April 30-May 1 policy meeting showed that policymakers still believed price pressures would ease, while seeing the need to maintain the restrictive policy at least until September. The benchmark 10-year US Treasury bond yield registered small gains on Wednesday and stabilized above 4.4% early Thursday. Meanwhile, US stock index futures trade in positive territory in the European morning, reflecting an improving risk sentiment.

The data from Australia showed early in the day that the Judo Bank Composite PMI declined to 52.6 in early May from 53 in April. AUD/USD showed no reaction to this report and was last seen trading modestly higher on the day above 0.6600.

Statistics New Zealand reported in the Asian session that Retail Sales grew by 0.5% on a quarterly basis in the first quarter. This reading followed the 1.6% contraction recorded in the previous quarter and came in better than the market expectation for a decline of 0.3%. NZD/USD edged higher after this report and was last seen rising more than 0.3% on the day near 0.6120.

Jibun Bank Manufacturing PMI in Japan improved to 50.5 in May from 49.6 and the Services PMI retreated to 53.6 from 54.3. After rising 0.4% on Wednesday, USD/JPY lost its bullish momentum and started to decline toward 156.50.

Following the choppy action seen earlier in the week, EUR/USD turned south and closed in negative territory on Wednesday. The pair, however, managed to stabilize above 1.0800.

GBP/USD lost its traction and erased a large portion of its daily gains after climbing to a new two-month high above 1.2750 early Wednesday, boosted by the stronger-than-forecast inflation data from the UK. The pair holds steady above 1.2700 in the European morning.

Gold came under heavy selling pressure after breaking below $2,400 and lost more than 1.5% on a daily basis on Wednesday. XAU/USD extends its slide early Thursday and was last seen trading below $2,370, losing over 0.5% on the day.

Economic Indicator

S&P Global Composite PMI

The S&P Global Composite Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging US private-business activity in the manufacturing and services sector. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for USD.

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Last release: Fri May 03, 2024 13:45

Frequency: Monthly

Actual: 51.3

Consensus: 50.9

Previous: 50.9

Source: S&P Global


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