The US Dollar Index (DXY) declined below 104.00 amid a pullback, coinciding with slight increases in US yields. Upcoming data includes Balance of Trade results, Initial Jobless Claims, final S&P Global Services PMI, Challenger Job Cuts, ISM Services PMI, and speeches from Fed officials.
EUR/USD rose past 1.0870 after two daily pullbacks. Relevant releases include the final HCOB Services PMI for Germany and the euro area, Producer Prices, ECB Accounts, and ECB speeches.
GBP/USD approached 1.2980, achieving four-day highs, with the final S&P Global Services PMI as the only data point.
Yen Reclaims Threshold
USD/JPY regained the 150.00 level, with weekly Foreign Bond Investment and final Jibun Bank Services PMI due.
AUD/USD reached weekly highs above 0.6300, with the final S&P Global Services PMI, Balance of Trade results, and RBA’s Financial Stability Report forthcoming.
WTI prices remained strong near $72.00 per barrel despite a noted build in US inventories.
Gold prices recovered, trading above $3,100 per troy ounce, while silver prices retested above $34.00 after three consecutive declines.
The earlier movement in the Dollar Index falling under the 104.00 mark, even as Treasury yields tried inching higher, points to a weakening dollar momentum not entirely driven by economic surprise. Rather, it seems we’ve seen some rotation, perhaps from safe-haven flows easing back, or reaction to the recent positioning built around expectations for Federal Reserve commentary.
This disconnect—between sliding dollar value and slightly firmer yields—might not hold for long. We’re facing a dense schedule of US macro releases in the coming sessions. The trade balance will give us clues about external demand, while jobless claims and the Challenger job cut figures may carry more weight than usual if labour market softening becomes a confirmed trend. For now, the services sector, captured both by ISM and S&P Global PMIs, carries most of the responsibility for economic resilience. Nothing Fed-linked is going to go unnoticed either; upcoming speeches should offer more calibration for rate path expectations and balance sheet inference.
Euro Holding Gains
For those aligned with the euro, the shared currency gaining traction beyond 1.0870 wasn’t entirely unexpected. Germany and eurozone-wide PMI numbers, if upwardly revised, could reinforce short-term confidence in service activity. Although PPI may carry less immediate directional influence, the publication of ECB meeting accounts is no mere formality. These insights allow us to track consensus—or lack thereof—within the governing council. With more speeches pending, any tone that veers from collective caution might feed directional opportunity.
In the UK case, the pound inching toward the 1.3000 threshold implies that momentum continues to lean on market structure rather than new data support, particularly with just the services PMI on deck. A lot has already been baked in via forward guidance. Recent GBP moves reflect a broader stance where the lack of bad news is treated almost as good news.
As Japan’s yen repeated a familiar journey back above 150 per US dollar, investor views around possible intervention start creeping back into conversations, whether justified or not. Weekly foreign bond flow updates can influence assumptions around capital behaviour, but domestic services sector insights may provoke more subtle shifts in expectations about internal support. Any underlying concern from officials would likely be revealed gradually, not frontloaded.
Meanwhile, the Australian dollar climbing past 0.6300 seems to have happened through a mix of positioning unwind and slight improvement in sentiment, though it will be tested by what the trade balance and the RBA’s Financial Stability Report uncover. Traders will likely watch whether external trade resilience is backed up by the domestic tone.
Turning to commodities, crude prices holding despite data showing an inventory increase is telling. We think it reflects expectations not of demand collapse, but more about supply risk continuing to tug prices back. Market watchers have adjusted to weekly build data not always mapping to directional response.
Gold finding its way above $3,100 and silver pushing past $34 shows a bounce from recent technical exhaustion. The retreat in the greenback likely bolstered both, but continued performance will hinge on how persistent the softer dollar theme proves. If economic releases and central bank signals in the coming days yield divergent messages, metals may benefit further from capital staying cautious. Shorter-term derivatives positioning in bullion remains sensitive to immediate shifts in real yields and volatility gauges, which we’ll have to monitor as the numbers come in.
