The US Dollar Index (DXY) continued its upward trajectory on Thursday, stabilizing near the 98.70 mark. This strength is attributed to better-than-anticipated US economic data and ongoing geopolitical tensions, which have instilled a cautious sentiment across global markets.
Economic indicators from the United States provided significant support. Weekly Initial Jobless Claims, though slightly up at 214,000 from 212,000, still reflect a robust labor market. Furthermore, preliminary S&P Global PMIs for April exceeded expectations, with Manufacturing reaching 54 and Services at 51.3. These figures underscore the US economy’s strong foundation, pushing US bond yields higher and consequently bolstering the dollar.
Geopolitical developments also played a role. A report from Israel’s N12 News suggested that Iranian Parliament Speaker Mohammad Bagher Ghalibaf had withdrawn from negotiations with the United States. While this report initially stirred markets, it was subsequently denied by several Iranian journalists, contributing to the prevailing uncertainty surrounding Middle East diplomatic efforts.
The Euro (EUR) faced downward pressure against the dollar, trading near 1.1690, as markets favored the robust US economic outlook. The British Pound (GBP) also weakened, drifting towards 1.3480, struggling against the dollar’s broad strength. Despite this, the UK’s S&P Global Composite PMI improved from 50.3 to 52, signaling growth in both manufacturing and services sectors, now comfortably above the expansionary threshold. The Japanese Yen (JPY) saw depreciation against the dollar, with USD/JPY advancing towards 159.50, driven by rising US yields. However, the upward movement remained tempered by persistent risks of intervention from Japanese authorities. The Australian Dollar (AUD) softened against the greenback, moving towards 0.7140, impacted by the stronger dollar and elevated yields. While the Reserve Bank of Australia’s (RBA) firm policy stance offered some support, global sentiment and US economic data continued to be the dominant factors.
In commodities, West Texas Intermediate (WTI) crude oil surged to nearly $96.00 per barrel, with prices buoyed by the ongoing tensions in the Middle East. Gold (XAU/USD) pulled back from the $4,710 mark. The precious metal faced pressure from rising bond yields and a stronger dollar, even as some safe-haven demand persisted.
Looking ahead, key economic releases for Friday, April 24, include: United Kingdom Retail Sales for March, Germany’s IFO Survey for April, Canada’s Retail Sales for February, and the United States’ Michigan Data and Inflation Expectations for April.
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