Forex Today: Dollar revives, but not out of the woods


Here is what you need to know for next week:

Markets are offering mixed signs amid an uncertain outlook. Not even central bankers know what to do next. After crucial economic data from the US, what is clear is that the economy is softening and inflation is slowing down. Another week went without a banking failure. 

The US Dollar staged a strong recovery on Friday, trimming weekly losses. Despite the revival, the trend remains down. Expectations point to one last rate hike by the Federal Reserve (Fed) in May and a long pause, before rate cuts. The bond market sees a recession ahead and, by the end of the year, lower interest rates than the current ones. 

Next week, the S&P Global PMIs will offer the first glance of economic activity during April across the globe, an essential report in times of concerns about growth and central banks' "data-dependence". Growth data from China will show the extent of re-opening. The latest export data was encouraging, helping global risk sentiment. 

The US Dollar Index dropped for the fifth consecutive week and posted the lowest weekly close since May. The DXY closed above 101.50, far from the lows, a positive sign for the US Dollar that does not suggest a reversal yet, but could point to a consolidation.

As has been the case since late February, EUR/USD rose for another week, and reached the highest level in a year above 1.1000. The trend is still up, but some exhaustion signs are spotted. Eurozone's PMIs next week could be critical for European Central Bank (ECB) expectations. Markets see the ECB raising rates further, but weak numbers could change the outlook for the second half of the year. 

GBP/USD ended flat around 1.2400 after retreating from a multi-month high above 1.2500. The deterioration in risk sentiment on Friday weighed on the Pound, which lagged the Euro. EUR/GBP posted the highest weekly close since February above 0.8850. Critical UK data is due next week, with job numbers and consumer inflation.

USD/JPY finished the week little changed, with modest gains near the 133.00 area. The Japanese Yen lost strength amid risk appetite and after hopes for a turnaround in Bank of Japan's (BoJ) monetary policy stance vanished following the first press conference of Kazuo Ueda, the new governor. 

USD/CHF continued to slide and broke decisively under 0.9000, to hit the weakest level since January 2021. The Swiss Franc and the Loonie were the top performers in the G10 space. USD/CAD bottomed around 1.3300, the lowest since February, then rebounded to 1.3400, to end the week with a loss of 140 pips. Next week, consumer inflation (Tuesday) and retail sales (Friday) are due in Canada.

When it looked like AUD/USD was ready for a run above 0.6800, it retreated, holding in the familiar range near 0.6700. This week's data showed strength in the labor market. The Reserve Bank of Australia (RBA) is still seen on hold at the next meeting. Next Tuesday, the central bank will release the minutes with details on the decision to pause the tightening cycle. 

NZD/USD continued to retreat from the peak at 0.6378, which followed the Reserve Bank of New Zealand (RBNZ) 50 basis point rate hike, and ended near 0.6200. New Zealand's Q1 inflation is due on Thursday. 
Latin American currencies were the best weekly performers despite falling on Friday. The Colombian Peso and the Chilean Peso gained more than 2.5% each versus the US Dollar. 

Gold looked at record highs and blinked, retreating on Friday to $2,000. The trend is still to the upside, but the sharp correction raises doubts about the short-term bullish potential. Silver lost 2% on Friday, trimming some of its weekly gains, but still scoring the fifth advance in a row. 

Bitcoin gained 8% during the week and it was holding above $30,000 at the highest level since June 2022. 


 


Like this article? Help us with some feedback by answering this survey:

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD trades sideways below 1.0450 amid quiet markets

EUR/USD trades sideways below 1.0450 amid quiet markets

EUR/USD defends gains below 1.0450 in European trading on Monday. Thin trading heading into the Xmas holiday and a modest US Dollar rebound leaves the pair in a familair range. Meanwhile, ECB President Lagarde's comments fail to impress the Euro. 

EUR/USD News
GBP/USD stays defensive below 1.2600 after UK Q3 GDP revision

GBP/USD stays defensive below 1.2600 after UK Q3 GDP revision

GBP/USD trades on the defensive below 1.2600 in the European session on Monday. The pair holds lower ground following the downward revision to the third-quarter UK GDP data, which weighs negatively on the Pound Sterling amid a broad US Dollar uptick. 

GBP/USD News
Gold price sticks to modest gains; upside seems limited amid USD dip-buying

Gold price sticks to modest gains; upside seems limited amid USD dip-buying

Gold price attracts some follow-through buying at the start of a new week and looks to build on its recovery from a one-month low touched last Thursday. Geopolitical risks stemming from the protracted Russia-Ukraine war and tensions in the Middle East, along with trade war fears, turn out to be key factors benefiting the safe-haven precious metal. 

Gold News
Bitcoin fails to recover as Metaplanet buys the dip

Bitcoin fails to recover as Metaplanet buys the dip

Bitcoin hovers around $95,000 on Monday after losing the progress made during Friday’s relief rally. The largest cryptocurrency hit a new all-time high at $108,353 on Tuesday but this was followed by a steep correction after the US Fed signaled fewer interest-rate cuts than previously anticipated for 2025. 

Read more
Bank of England stays on hold, but a dovish front is building

Bank of England stays on hold, but a dovish front is building

Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures