The US dollar continued its downward trend on Thursday, affected by a weak inflation reading from producer prices along with mixed economic data. There are growing concerns regarding the longevity of the recent US trade agreement as well.
What to expect on Friday, May 16th:
Sellers took charge, pushing the US Dollar Index (DXY) further downwards for the week, coinciding with a drop in US yields. The day’s economic reports include building permits, housing starts, import prices, the University of Michigan Consumer Sentiment Index, and net TIC flows. Additionally, Federal Reserve official Thomas Birkin will be giving remarks.
EUR/USD closed Thursday at around 1.1180, unable to hold onto gains that had peaked near 1.12430. Attention is now shifting towards eurozone inflation data, with the final print due on May 19th.
The GBP/USD bounced back significantly, surpassing the 1.3300 mark, bolstered by positive local economic data and a weaker dollar. The next critical update for the UK will come on May 21 with the inflation rate release.
USD/JPY has dropped for a third consecutive day, reaching weekly lows around the 145.50 level. Upcoming data from Japan includes Flash Q1 GDP and industrial production, with comments expected from Boji Nakamura.
AUD/USD also followed Wednesday’s downturn, dipping around the 0.6400 level. Traders are keenly awaiting the Reserve Bank of Australia’s (RBA) policy meeting scheduled for May 20th.
WTI crude fell, nearing the important $60.00 per barrel mark, driven by speculation regarding US-Iraq nuclear negotiations impacting energy prices and market sentiment.
Gold prices increased, climbing above $3,200 per troy ounce, supported by a soft dollar and rising expectations for easing measures later this year. Silver prices mirrored this trend, bouncing back to the $32.50 range per ounce after briefly dipping to $31.60.
