The action in financial markets is quiet on Friday as investors await preliminary February manufacturing and services Purchasing Managers’ Index (PMI) data from Germany, the Eurozone, the UK and the US.
Later in the day, the US economic calendar will also feature Existing Home Sales for January and several Federal Reserve policymakers will be delivering speeches heading into the weekend.
Following a two-day recovery, the DXY Dollar Index came under renewed bearish pressure during US trading on Thursday and dropped to its lowest level in over two months near 106.30. Data showed that the weekly Initial Jobless Claims rose to 219,000 from 214,000.
Meanwhile, the benchmark 10-year US Treasury bond yield dropped below 4.5%, putting additional weight on the USD’s shoulders. Early Friday, the index is in a consolidation phase at around 106.50.
In early trading in Asian markets, the data from Japan showed that the national consumer price index (CPI) in Japan increased by 4% on a yearly basis in January, up from 3.6% in December.
Commenting on the policy outlook, Bank of Japan (BoJ) Governor Kazuo Ueda said on Friday that, “more interest rate hikes could come into sight if the price outlook continues to improve, and there might be some unpredictable impact on the economy.”
After losing more than 1% on Thursday, USDJPY stages a rebound on Friday and was last seen rising about 0.6% at 150.50.
Jibun Bank Composite PMI in Australia edged higher to 51.2 in January from 51.1, suggesting that the private sector’s economic activity continued to expand at a modest pace.
In the meantime, Reserve Bank of Australia Governor Michele Bullock said that they will remain cautious about the prospects for further policy easing. After reaching its highest level since early December above 0.6400, AUDUSD corrects lower toward 0.6380 in early European markets.
The UK’s Office for National Statistics (ONS) reported on Friday that Retail Sales rose by 1.7% on a monthly basis in January. This followed the 0.6% decrease recorded in December and beat the market expectation of 0.3% by a wide margin. GBPUSD holds its ground and trades at a fresh two-month high above 1.2670.
EURUSD benefited from the broad-based dollar weakness and rose more than 0.7% on Thursday. The pair fluctuates in a narrow band at around 1.0500 early Friday.
Gold reached yet another record-high above $2,950 on Thursday but struggled to preserve its bullish momentum. In the European morning, XAUUSD trades in negative territory near $2,930.
(Source: OANDA)
