This is what you need to know to trade today Thursday April 21:
Pressured by the sharp decline seen in US Treasury bond yields, the dollar weakened against its main rivals on Wednesday. The dollar holds its ground at the start of the European session on Thursday, as investors expect the FOMC chairman, Jerome Powelland the President of the European Central Bank (ECB), Christine Lagarde, speak at the IMF spring meeting. The European economic calendar will include the final revision of inflation figures for March and preliminary consumer confidence data for April. In the second half of the day, the release of weekly initial jobless claims and the US Philadelphia Fed manufacturing survey delpiha could provide further momentum.
See: Powell Preview: Fed Chairman to be humbled by three uncertainties, triggering dollar slide
With yields on 10-year US Treasury Inflation-Protected Securities (TIPS) moving into positive territory on Wednesday, the 10-year Treasury yield fell 3.5% and the US dollar index DXY lost 0.65%. Also, the mixed comments from Fed officials did not allow the dollar to strengthen.
Chicago Fed President Charles Evans noted that he did not expect inflation to return to 2% next year, but added that there is good reason to think that the special factors driving inflation higher would subside. Commenting on the rate outlook, San Francisco Fed President Mary Daly noted that it would be “sharp or surprising” to see the monetary policy rate rise to 2.5% this year.
The EUR/USD gained over 50 pips on Wednesday and is now trading sideways near 1.0850. In addition to the broad dollar weakness, aggressive comments from the ECB helped the common currency find demand. The ECB’s chief policy officer, Martins Kazaks, said on Wednesday that a rate hike could come as soon as July and policymaker Pierre Wunsch said on Thursday that rates could turn positive this year.
The GBP/USD snapped a four-day losing streak on Wednesday. The pair remains relatively calm near 1.3050 at the beginning of the European session, while the market valuation of the dollar remains the main driver of the pair’s movements.
The USD/JPY finally experienced a downward correction on Wednesday after touching a multi-decade high at 129.24. The pair appears to have entered a consolidation phase near 128.00 with the 10-year US Treasury yield recovering a small part of its latest losses on Thursday.
See: Will the BoJ Drop an SNB-Like Bomb? USD/JPY can collapse quickly with hundreds of pips at stake
After Tuesday’s sharp drop, the Prayed posted modest gains on Wednesday. Market optimism in the second half of the day made it difficult for the yellow metal to find demand despite falling US yields. XAU/USD is trading in a tight channel around $1,950 on Thursday.
The Bitcoin rallied above $42,000 on Wednesday but lost its upside momentum. At time of writing, BTC/USD is trading sideways on the day at $41,500. The ethereum closed in negative territory on Wednesday, but managed to stay afloat above the key $3,000 level.
Source: Fx Street
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