Forex Today: US inflation bolstered the risk appetite

Pablo Piovano FXStreet

The risk complex regained strong upside traction on the back of the generalized offered stance in the US Dollar in the wake of the release of US inflation data measured by the CPI in April.

Here is what you need to know on Thursday, May 16:

A dreadful session for the Greenback saw the USD Index (DXY) retreat further and revisit the area of the key 200-day SMA near 104.30 on Wednesday. On May 16, the US housing sector takes centre stage with the releases of monthly Building Permits and Housing Starts seconded by the usual Initial Jobless Claims, the Philly Fed Manufacturing Index and Industrial Production. In addition, Fed’s Barr, Harker, Mester and Bostic are all due to speak.

EUR/USD rose for the third session in a row and approached the 1.0900 hurdle always on the back of further USD-selling.The ECB’s Financial Stability Review will be the sole release on the domestic docket on May 16.

GBP/USD extended further its march north and traded at shouting distance from the 1.2700 hurdle. The BoE’s Financial Stability Report will be out on May 16.

USD/JPY interrupted its multi-day uptrend and receded to multi-session lows in the sub-155.00 zone following increasing weakness in the Dollar and declining yields. The advanced Q1 GDP Growth Rate, final Industrial Production prints and weekly Foreign Bond Investment are expected on May 16.

A robust session in the risk-linked assets propelled AUD/USD to levels just shy of the 0.6700 hurdle ahead of key data in Australia. The release of the labour market report and the speech by RBA’s Hunter are all due on May 16 in Oz.

A larger-than-expected drop in US crude oil supplies and the sharp pullback in the Greenback sustained the decent uptick in WTI prices despite the discouraging IEA report.

Gold prices surged to the proximity of the $2,400 zone per troy ounce on the back of rising expectations of Fed interest rate cuts, the weaker Dollar, and lower US yields. Silver followed suit and approached the key $30.00 mark per ounce, or five-week highs.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD trims losses, back to 1.1830

EUR/USD manages to regain some composure, leaving behind part of the earlier losses and reclaim the 1.1830 region on Tuesday. In the meantime, the US Dollar’s upside impulse loses some momentum while investors remain cautious ahead of upcoming US data releases, including the FOMC Minutes.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.