After yesterday's reversal from one-month high, sluggish US Dollar performance had been a key theme during Asian session on Thursday despite of Wednesday's strong US economic reports, record high levels for the US equity indices and rising treasury bond yields.
Lack of sustained follow through buying interest in wake of slightly cautious comments from the Fed Chair Janet Yellen, during the second day of her testimony before the House Financial Services Committee on Wednesday, seems to be primary drivers of the greenback's retracement on Thursday.
Meanwhile, the Australian Dollar reversed mixed jobs data led early gains as further details revealed that jobs growth was solely driven by part-time jobs, with a contraction in full-time jobs.
Against the backdrop of growing expectations for an eventual Fed rate-hike action, sooner-rather-than-later, market participants on Thursday would look forward to the US economic data featuring the release of housing starts, building permits, weekly jobless claims and Philly Fed manufacturing index. Meanwhile, ECB is scheduled to release the monetary policy meeting minutes during European trading session.
Main topics in Asia
Japanese MoF: didn’t discuss FX with US Treasury Secretary Mnuchin
Japanese Ministry of Finance (MoF) informed markets that a phone call between US Treasury Secretary Mnuchin and Japanese Finance Minister did not include a discussion on the exchange rate.
Fed’s Dudley calls stock market rally unusual
Fed’s Dudley calls the stock market rally unusual given the enormous rise in the policy uncertainty. Dudley sees Fed raising rates a little further in months ahead, as the inflation is seen moving towards Fed’s 2% objective.
EUR/USD jumps above 1.06 as the Treasury yields drop
The EUR/USD pair jumped to a session high of 1.0624 this Thursday morning on the back of a drop in the treasury yields.
Australian Jan employment headline upbeat, full-time jobs suffer sharp fall
Australia employment change s.a. came in at +13.5k in January, above forecasts of +10k and prior of 13.5k, with the unemployment rate s.a. at 5.7% vs forecasts of 5.8% and 5.8% last.
Key focus for the day ahead
GBP/USD - Rejected again at 1-hour 50-MA, is the pair overpriced?
GBP/USD fails again to take out the 1-hour 50-MA, marking the third failure at the moving average in the last twelve hours.
US and UK key data points, divergence of inflationary environment - ANZ
Analysts at ANZ noted that US Jan CPI beat expectations overnight at 2.5% y/y - its highest increase since March 2012.
S&P 500 - break of 2340-2346 would add weight to our bullish view – Natixis
Natixis Technical Research note sees a potential for a rally to 2360-2367 post a break above 2340-2346 levels.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.