Forex Today: Dollar consolidates gains following Thursday's impressive rally

Here is what you need to know on Friday, August 19:

The US Dollar Index (DXY), which tracks the dollar's performance against a basket of six major currencies, gathered bullish momentum in the second half of the day on Thursday and climbed to its highest level in a month above 107.50. In the absence of high-tier macroeconomic data releases, the DXY stays in a consolidation phase early Friday. Meanwhile, the 10-year US Treasury bond yield holds above 2.9% and US stock index futures are down between 0.25% and 0.45%, helping the greenback stay resilient against its major rivals.

Hawkish comments from Fed officials helped the dollar outperform its rivals. In an interview with CNN on Thursday, "the markets have a lack of understanding but consumers understand that rates won't go down right after they go up," San Francisco Fed President Mary Daly said. Regarding the September rate decision, Daly said either a 50 basis points (bps) or a 75 bps hike would be appropriate. On the same note, St. Louis Federal Reserve Bank President James Bullard noted that he was leaning toward a 75 bps hike at the next meeting.

Earlier in the day, the data from Germany revealed that the Producer Price Index (PPI) jumped to 37.2% on a yearly basis in July from 32.7% in June. This print came in much higher than the market expectation of 32%. EUR/USD, which slumped to its lowest level since mid-July below 1.0100, showed no immediate reaction to this data and was last seen trading flat on the day at 1.0085.

The UK's Office for National Statistics reported that Retail Sales rose by 0.3% on a monthly basis in July following June's contraction of 0.2%. Although this print came in better than the market forecast for a decrease of 0.2%, it failed to help the British pound find demand. GBP/USD trades in negative territory slightly above 1.1900 following Thursday's sharp decline.

USD/JPY extended its rally and closed the third straight day in positive territory on Thursday. At the time of press, the pair was up 0.3% on the day at 136.30, trading at its highest level since July 28. 

Gold dropped below $1,760 on Thursday and struggled to stage a rebound. With US T-bond yields edging higher, XAU/USD stays on the back foot near $1,755 in the early European session.

Bitcoin came under heavy pressure and declined below $22,000 on Friday. After having registered small losses on Thursday, Ethereum turned south and was last seen losing more than 5% on a daily basis at around $1,750.