US Dollar Faces Selling Pressure Ahead of Economic Data Releases
In the financial markets, the US Dollar is experiencing a period of modest selling pressure as investors brace themselves for a series of key data releases. The anticipation is particularly high for the upcoming GDP growth figures from the US Bureau of Economic Analysis, which will provide the first estimate of annualized growth for Q1. Additionally, the Department of Labor is set to release the weekly Initial Jobless Claims data, offering further insight into the labor market’s health.
Despite a sharp decline on Tuesday, the USD Index saw only minor losses on Wednesday, finding some support from positive Durable Goods Orders data for March. The cautious sentiment in the market has also played a role in maintaining the currency’s resilience, especially against those considered more sensitive to risk.
As trading commenced early Thursday, the USD Index continued to hover in negative territory, with a slight downward trend towards 105.50. Projections suggest that the US economy may have grown at an annual rate of 2.5% in the first quarter, a slight deceleration from the 3.4% expansion seen in the final quarter of 2022.
Concurrently, US stock index futures experienced a downturn in early European trading, while the 10-year US Treasury yield remained volatile, staying just above 4.6%. In the currency markets, the EURUSD pair gained momentum, reaching a near two-week high above 1.0720. This movement comes as investors await speeches from several European Central Bank (ECB) policymakers throughout the day.
The GBPUSD pair also showed signs of strength, closing positively for two consecutive days and inching closer to the 1.2500 mark in early European trading on Thursday. Meanwhile, the USDJPY pair surged past 155.00, hitting a multi-decade peak above 155.50, with markets eyeing the upcoming Bank of Japan’s monetary policy announcement on Friday.
In commodities, gold experienced only marginal losses on Wednesday. However, after a slight dip toward $2,300 in Asian trading on Thursday, XAUUSD managed a recovery, with prices last observed above the $2,320 level.
