Forex Today: Weak US data hurt the Dollar and boosted risk appetite

Extra losses in the Greenback prompted another pullback in the USD Index (DXY), underpinning the appetite for the risk-linked universe amidst renewed speculation of interest rate cuts by the Fed.

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

The USD Index (DXY) came under extra downside pressure after US Retail Sales contracted more than estimated in January, lending some support to the view of a potential rate cut in May. At the end of the week, the US housing sector and inflation data will take centre stage with the releases of Producer Prices, Housing Starts and Building Permits, all ahead of the advanced Michigan Consumer Sentiment gauge. In addition, the Fed’s Barr and Daly are also due to speak.

EUR/USD extended its bounce off yearly lows and approached the key 1.0800 barrier once again, all amidst a favourable risk-on environment. Absent data releases on February 16, the speech by the ECB’s Schnabel should keep investors entertained.

GBP/USD resumed the uptrend and managed to leave behind the key 200-day SMA (1.2562) and revisit the 1.2600 neighbourhood. Across the Channel, Retail Sales will be the sole data release prior to the speech by BoE’s Pill.

USD/JPY added to the previous session’s decline and receded to the mid-149.00s, where some initial contention seems to have turned up. The Japanese docket includes the weekly Foreign Bond Investment figures and the Tertiary Industry Index on February 16.

AUD/USD remained on track to recover the ground lost after Tuesday’s deep sell-off and advanced further north of 0.6500 the figure, as market participants quickly left behind discouraging prints from the domestic job report.

Prices of WTI regained the smile on the back of the weaker dollar, persistent geopolitical effervescence, and the Fed’s rate cut expectations.

Both Gold and Silver prices edged higher on the back of declining US yields, another negative session of the Greenback as well as the broad-based upbeat tone in the commodity universe.