Forex Today: US inflation bolstered the risk appetite


The risk complex regained strong upside traction on the back of the generalized offered stance in the US Dollar in the wake of the release of US inflation data measured by the CPI in April.

Here is what you need to know on Thursday, May 16:

A dreadful session for the Greenback saw the USD Index (DXY) retreat further and revisit the area of the key 200-day SMA near 104.30 on Wednesday. On May 16, the US housing sector takes centre stage with the releases of monthly Building Permits and Housing Starts seconded by the usual Initial Jobless Claims, the Philly Fed Manufacturing Index and Industrial Production. In addition, Fed’s Barr, Harker, Mester and Bostic are all due to speak.

EUR/USD rose for the third session in a row and approached the 1.0900 hurdle always on the back of further USD-selling.The ECB’s Financial Stability Review will be the sole release on the domestic docket on May 16.

GBP/USD extended further its march north and traded at shouting distance from the 1.2700 hurdle. The BoE’s Financial Stability Report will be out on May 16.

USD/JPY interrupted its multi-day uptrend and receded to multi-session lows in the sub-155.00 zone following increasing weakness in the Dollar and declining yields. The advanced Q1 GDP Growth Rate, final Industrial Production prints and weekly Foreign Bond Investment are expected on May 16.

A robust session in the risk-linked assets propelled AUD/USD to levels just shy of the 0.6700 hurdle ahead of key data in Australia. The release of the labour market report and the speech by RBA’s Hunter are all due on May 16 in Oz.

A larger-than-expected drop in US crude oil supplies and the sharp pullback in the Greenback sustained the decent uptick in WTI prices despite the discouraging IEA report.

Gold prices surged to the proximity of the $2,400 zone per troy ounce on the back of rising expectations of Fed interest rate cuts, the weaker Dollar, and lower US yields. Silver followed suit and approached the key $30.00 mark per ounce, or five-week highs.

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