Forex Today: US Dollar pulls away from multi-month highs ahead of mid-tier data


Here is what you need to know on Thursday, April 18:

The US Dollar (USD) stays under modest selling pressure in the early European session on Thursday. The US economic calendar will offer weekly Initial Jobless Claims, Philadelphia Fed Manufacturing Survey for April and Existing Home Sales data for March. Several Federal Reserve (Fed) policymakers are scheduled to deliver speeches during the American trading hours.

The USD Index stays in negative territory below 106.00 after touching its highest level since early November at 106.50 on Wednesday. Following a sharp decline midweek, the benchmark 10-year US Treasury bond yield fluctuates below 4.6%. Meanwhile, US stock index futures trade in positive territory, reflecting an improving risk mood in the European morning. The US and the EU are expected to expand sanctions against Iran and markets seem to be optimistic about an avoidance of further escalation of the conflict between Iran and Israel.

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   -0.12% -0.08% -0.14% -0.07% -0.04% -0.16% -0.12%
EUR 0.11%   0.03% -0.02% 0.04% 0.08% -0.05% -0.05%
GBP 0.08% -0.03%   -0.06% 0.00% 0.05% -0.09% -0.06%
CAD 0.14% 0.02% 0.06%   0.07% 0.10% -0.03% 0.00%
AUD 0.07% -0.04% -0.01% -0.07%   0.04% -0.10% -0.07%
JPY 0.04% -0.07% -0.05% -0.12% -0.03%   -0.14% -0.10%
NZD 0.16% 0.06% 0.08% 0.03% 0.10% 0.14%   0.03%
CHF 0.13% 0.05% 0.03% -0.01% 0.04% 0.13% -0.04%  

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 Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

 

During the Asian trading hours, the data from Australia showed that the Unemployment Rate edged higher to 3.8% in March from 3.7%, while the Employment Change came in at -6.6K, missing the market expectation for an increase of 7.2K. After snapping a three-day losing streak on Wednesday, AUD/USD stretched higher and was last seen trading in positive territory at around 0.6450.

Australian Dollar holds position amid tepid US Dollar ahead of Fedspeak.

USD/JPY staged a downward correction and closed in negative territory on Wednesday. The pair inched slightly lower in the Asian session and was last seen trading slightly above 154.00. National Consumer Price Index (CPI) data will be featured in the Japanese economic docket in the early hours of the Asian session on Friday.

Gold fell nearly 1% on Wednesday but found support near $2,360. XAU/USD gathered bullish momentum early Thursday and recovered toward $2,380.

EUR/USD rebounded decisively and gained 0.5% on Wednesday. The pair holds its ground early Thursday and trades slightly below 1.0700. Eurostat will publish Construction Output data for February later in the session. 

GBP/USD registered marginal gains on Wednesday and started to fluctuate in a narrow range above 1.2450 on Thursday. The UK's Office for National Statistics will release Retail Sales data for March in the early European session on Friday.

Employment FAQs

Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.

The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.

The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.

 

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