This is what you need to know to trade today Thursday May 12:
The dollar regained its strength after Wednesday’s US inflation data and continued to outperform its rivals during the Asian session on Thursday. The dollar index is at its highest level since late 2002, above 104.00, ahead of US April producer price index (PPI) data. Meanwhile, major European stock indices remain on track to open in negative territory, with Euro Stoxx 600 futures shedding almost 2% on the day. Similarly, US stock index futures are down 0.3%, reflecting the market’s risk-averse environment.
Data released by the US Bureau of Labor Statistics showed on Wednesday that inflation as measured by the Consumer Price Index (CPI), was 8.3% annually in April. Although this figure was lower than that of March (8.5%), it exceeded market expectations (8.1%). In addition, the core CPI, which excludes volatile food and energy prices, came in at 6.2% in the same period, versus analysts’ estimate of 6%.
US CPI Analysis: Dark Clouds Hover Over Inflation Ceiling, King Dollar Dominates
Earlier in the day, the UK Office for National Statistics (ONS) reported that the Gross Domestic Product (GDP) expanded by 0.8% in the first quarter. This figure fell short of market expectations of 1%, putting sterling under further selling pressure. Other UK data revealed that manufacturing output declined 0.2% in March, following a 0.6% contraction in February. The GBP/USD it last traded at its lowest level in two years, near 1.2200.
The EUR/USD remains down in early Thursday hours and tests 1.0500. Aggressive comments from European Central Bank (ECB) officials did not help the shared currency find demand on Wednesday. The president of the ECB, Christine Lagarde, acknowledged that it is increasingly unlikely that the disinflationary dynamics of the past decade will return and reiterated that a rate hike could come a few weeks after the APP is concluded at the beginning of the third quarter.
The NZD/USD It trades this Thursday at its lowest level in almost two years, around 0.6250. In the Asian session, the Reserve Bank of New Zealand (RBNZ) announced quarterly inflation expectations for the second quarter at 3.29%.
The Prayed managed to snap a two-day losing streak on Wednesday before entering a consolidation phase around $1,850 early on Thursday. The 10-year US Treasury bond yield fell more than 2% on Wednesday and is already down 2.5% on Thursday, helping XAU/USD hold up.
The USD/JPY closed below 130.00 on Wednesday and continued to push lower during the Asian session, with the yen attracting investors as a safe haven. At press time, the pair was down 0.4% on the day, trading at 129.40.
The cryptocurrencies they continue to suffer heavy losses and Bitcoin was last seen trading at its weakest level since January 2021, at $26,600, losing more than 8% on a daily basis. Similarly, the ETH/USD it is down 12% on the day, at $1,830.
Source: Fx Street
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