The U.S. dollar gave up its yesterday gains, and slipped nearly 0.71% yesterday. Stronger than expected earnings from tech heavyweights Microsoft. And Google owner Alphabet, have helped to improve sentiment which resulted in the recent fall in dollar.
Euro gained after the forward looking German GfK consumer sentiment index came in at -25.7 for May. An improvement from the revised prior reading of -29.3, and the seventh increase in a row.
Dollar index traded 0.35% lower at 101.4620, after posting a 0.51% gain in the previous session.
Precious metals remain in pressure ahead of the BOJ policy meeting, scheduled on Friday. The Bank of Japan (BOJ) is set to keep monetary policy steady. And may struggle to raise interest rates off their ultra-low levels this year due to the weak economy. The country’s former top currency diplomat Hiroshi Watanabe said on Wednesday.
With inflation exceeding the BOJ’s 2% target. Some market players bet the central bank will phase out its controversial bond yield control policy as early as this week’s meeting.
Gold prices retreated over 0.60%, and settled at 59880 compared to previous day’s close of 60178. Silver prices plunged by 0.49% and settled at 73883 compared to 74157.00.
Base metals had a negative trade, except for the Zinc which settled up by 1.26%. Copper Aluminum, and Lead prices settled down by 0.09%, 0.14% and 0.36%, respectively.
Crude oil prices slipped on Wednesday, extending sharp losses from the previous session. Even after a report showed that U.S. crude inventories fell more than expected last week. As weak economic data raised fears of recession in the world’s biggest economy.
U.S. crude oil inventories fell last week by 5.1 million barrels to 460.9 million barrels. Far exceeding analysts’ expectations in a Reuters poll for a 1.5 million-barrel drop. The Energy Information Administration (EIA) said.
Gasoline and distillate stocks also drew down by 2.4 million barrels to 221.1 million barrels. And almost 600,000 barrels into 111.5 million barrels, respectively, the EIA said.
Economic data and events to watch
EUROZONE
At 11.30am – Spanish Unemployment Rate. Data is foreseen at 13.0% from 12.9%.
Above data could have a positive impact on the Euro.
US
At 6.00 pm – Advance GDP q/q, data is foreseen at 2% slightly lower from 2.6% previous.
Unemployment Claims, data is foreseen at 247k higher from 245k previous week claims.
Advance GDP Price Index q/q, data is foreseen at 3.7% lower from previous 3.9% .
7.30pm – Pending Home Sales m/m, data is foreseen at 0.6% lower from previous 0.8%.
All above data expect to have a negative impact on the dollar.
8.00pm – Natural Gas Storage Inventories, data is foreseen at 76B compared to 75B previous.
All above data expect to have a negative impact on Natural gas.