Forex Today: Greenback comeback amid souring US-Sino relations, three US figures and PMIs eyed

Here is what you need to know on Thursday, May 21:

Markets have taken a pause after rising on Wednesday, with the dollar rebounding from the lows. Gold is gradually declining while oil prices are holding up. Coronavirus statistics are encouraging all over the world, despite cases touching the five million mark. The economic recovery is long. 

Sino-American relations remain tense. President Donald Trump accused the second-largest economy of a massive disinformation campaign to boost rival Joe Biden, The White House issued a 20-page document listing China's predatory economic policy, military buildup, and other issues. Democrats have also ramped up efforts against Beijing, with Representative Brad Sherman introducing a bill scrutinizing China. Huawei is also closely watched by regulators in Washington. 

China is ramping efforts to become technologically independent from foreign providers, another step in the decoupling.

No more fiscal support? Senate Majority leader Mitch McConnell rejects extending special unemployment benefits beyond July, a policy that could hurt consumption. 

The Federal Reserve's meeting minutes consisted of few novelties after several days of speeches from officials. Members considered performance-based or time-based forward-guidance. There was no mention of negative interest rates. 

Vaccine?: Further details about Mdoerna's potential coronavirus immunization and other efforts are awaited. News about a breakthrough lifted stocks early in the week. 

Eurozone: Markit's preliminary Purchasing Managers' Indexes for May are projected to show rebounds in services sectors as economies open up, yet a mixed picture in manufacturing ones. All the PMIs carry expectations of remaining below 40, well below the 50-point threshold separating expansion and contraction. France and Germany are off today.

Eurozone coronavirus statistics remain encouraging with Germany's reproduction rate remaining below 1 while Spain's daily death toll holds under 100. A group of northern countries, dubbed the "frugal four" rejects the Franco-German €500 billion fund proposal and aims for a more responsible budget. Deliberations continue. 

GBP/USD remains on the back foot after Andrew Bailey, Governor fo the Bank of England, said that setting negative rates is "actively under review." He added that his position on the topic changed during the pandemic. The government sold new bonds with sub-zero returns on Wednesday.

Brexit talks remain stuck as the deadline for extending the transition period is ticking down. EU Chief Negotiator Michel Barnier lashed back at his British counterpart David Frost, saying the recent tone undermines confidence. UK preliminary PMIs are also forecast to bounce from the extreme lows, especially the all-important services sector.

Three US economic indicators are of interest, jobless claims, flash PMIs, and housing figures. Improvements are projected in the first two, while the Existing Home Sales are set to plunge. 

• Markit PMI Preview: Is the bottom in?
• Existing Home Sales Preview: Unemployment drains consumer confidence
• US Initial Jobless Claims: Will there be a hiring surge?

The Australian dollar has dropped off its highs amid the worsening mood as and as the government warns that the recession is "significantly gloomier" than forecasts published by the International Monetary Fund.

NZD/USD is also retreating from the highs despite efforts to return to normal. Prime Minister Jacinda Ardern suggested moving to a four-day week to encourage internal tourism. 

Cryptocurrencies: Bitcoin has been extending its minor decline, trading around $9,400. 

More: Tide turning for the euro?