The US dollar managed to remain resilient against its major counterparts on Thursday, but it appears to have lost its bullish momentum on Friday. Market participants will be closely watching the US Bureau of Economic Analysis’ (BEA) Personal Consumption Expenditures (PCE) Price Index data, the US Federal Reserve’s preferred gauge of inflation, alongside Personal Spending and Personal Income figures for February. January New Home Sales data and Fedspeak will also be closely monitored.
The BEA announced on Thursday that it revised the annualized real Gross Domestic Product (GDP) growth for the fourth quarter to 2.7% from 2.9%. On a positive note, weekly Initial Jobless Claims stayed below 200,000 for the sixth consecutive week, which is a reminder of the tight labor market conditions. The US Dollar Index (DXY) edged higher after this data, but the improving market sentiment, as reflected by considerable gains in Wall Street’s main indexes, limited the DXY’s upside. Meanwhile, the benchmark 10-year US Treasury Bond yield lost nearly 1% on Thursday and declined below 3.9% early Friday.
The EUR/USD registered small losses on Thursday and is currently in a consolidation phase at around 1.0600 in the early European session. Data from Germany revealed that the GDP contracted by 0.4% on a quarterly basis in the fourth-quarter, compared to the initial estimate of -0.2%.
Following some fluctuations during the Asian trading hours, the USD/JPY holds steady below 135.00 in the European morning. Incoming Bank of Japan (BoJ) Governor Kazuo Ueda said on Friday that the weak Japanese Yen was good for exports, inbound tourism and some service sectors. Ueda, however, also acknowledged that the weak Yen was impacting households negatively. “We would need to normalize policy if inflation makes headway towards 2% target,” Ueda further noted.
The GBP/USD closed the second straight day in negative territory on Thursday, but managed to hold above 1.2000. The pair is relatively quiet early Friday.
Gold prices touched their lowest level of 2023 below $1,820 on Thursday but erased its daily losses amid retreating US T-bond yields. XAU/USD moves sideways at around $1,825 on Friday.
The Bitcoin declined for the third consecutive day on Thursday and continued to edge lower early Friday. BTC/USD was last seen trading at around $23,900. Ethereum registered small losses on Thursday but lost its recovery momentum near $1,700. In the European morning on Friday, ETH/USD trades flat on the day at $1,650.
The US dollar was able to maintain its strength against its major rivals on Thursday, but the bullish momentum appears to have been lost on Friday. Market participants will be closely watching the US Bureau of Economic Analysis’ (BEA) Personal Consumption Expenditures (PCE) Price Index data, the US Federal Reserve’s preferred measure of inflation, alongside Personal Spending and Personal Income figures for February. January New Home Sales data and Fedspeak will also be closely monitored.
The BEA announced on Thursday that it revised the annualized real Gross Domestic Product (GDP) growth for the fourth quarter to 2.7% from 2.9%. On a positive note, weekly Initial Jobless Claims stayed below 200,000 for the sixth consecutive week, which is a reminder of the tight labor market conditions. The US Dollar Index (DXY) edged higher after this data, but the improving market sentiment, as reflected by considerable gains in Wall Street’s main indexes, limited the DXY’s upside. Meanwhile, the benchmark 10-year US Treasury Bond yield lost nearly 1% on Thursday and declined below 3.9% early Friday.
The EUR/USD registered small losses on Thursday and is currently in a consolidation phase at around 1.0600 in the early European session. Data from Germany revealed that the GDP contracted by 0.4% on a quarterly basis in the fourth-quarter, compared to the initial estimate of -0.2%. Following some fluctuations during the Asian trading hours, the USD/JPY holds steady below 135.00 in the European morning. Incoming Bank of Japan (BoJ) Governor Kazuo Ueda said on Friday that the weak Japanese Yen was good for exports, inbound tourism and some service sectors. Ueda, however, also acknowledged that the weak Yen was impacting households negatively. “We would need to normalize policy if inflation makes headway towards 2% target,” Ueda further noted.
The GBP/USD closed the second straight day in negative territory on Thursday, but managed to hold above 1.2000. The pair is relatively quiet early Friday. Gold prices touched their lowest level of 2023 below $1,820 on Thursday but erased its daily losses amid retreating US T-bond yields. XAU/USD moves sideways at around $1,825 on Friday.
The Bitcoin declined for the third consecutive day on Thursday and continued to edge lower early Friday. BTC/USD was last seen trading at around $23,900. Ethereum registered small losses on Thursday but lost its recovery momentum near $1,700. In the European morning on Friday, ETH/USD trades flat on the day at $1,650.
The US PCE Price Index data, the US Federal Reserve’s preferred measure of inflation, is expected to be released on Friday. The data will be closely watched by market participants as it will provide further insight into the strength of the US economy. If the data comes in above the forecast, it could boost the US dollar and push it higher against its major rivals.
On the other hand, if the data comes in below expectations, it could signal a weakening of the US economy and could lead to a sell-off in the US dollar. This could provide an opportunity for investors to take advantage of the lower prices and buy the US dollar.
The US Treasury Bond yields are also expected to be closely watched by market participants. If the yields continue to decline, it could signal that investors are becoming more risk averse and could lead to a weakening of the US dollar. This could provide an opportunity for investors to take advantage of the lower prices and buy the US dollar.
Overall, the US dollar is likely to remain volatile as market participants digest the various economic data releases. Investors should remain cautious and monitor the economic data closely to take advantage of any potential trading opportunities.
