The US Dollar (USD) encountered fresh selling pressure midweek following dovish remarks from Federal Reserve policymakers. The USD Index dropped nearly 0.5%, marking its lowest daily close since late March on Wednesday. As of early Thursday, the index steadies itself, fluctuating narrowly above 103.50. Meanwhile, the benchmark 10-year US Treasury bond yield remains below 4.2%, and US stock index futures trade modestly higher.
In the Asian trading session, Australia’s latest labor market data revealed a slight increase in the Unemployment Rate, rising to 4.1% in June from 4% in May. Employment Change recorded a growth of 50.2K, with Full-Time Employment up by 43.3K. Following this data, AUD/USD edged slightly higher, trading in positive territory near 0.6740.
The UK’s Office for National Statistics reported early Thursday that the ILO Unemployment Rate remained steady at 4.4% for the three months ending in May. During the same period, annual wage inflation, as indicated by Average Earnings Including Bonus, decreased to 5.7% from 6%. After reaching a fresh 2024-high of 1.3045 on Wednesday, GBP/USD entered a consolidation phase, fluctuating around 1.3000 during the European morning.
USD/JPY experienced a significant drop, falling more than 1% on Wednesday and continuing its decline during the Asian session on Thursday. The pair hit its weakest level since early June at 155.35 before rebounding to trade flat above 156.00. Kazushige Kamiyama, a senior official at the Bank of Japan (BoJ), reiterated the central bank‘s commitment to maintaining an accommodative monetary environment, as reported by Jiji News Agency. Market participants will look to Japan’s National Consumer Price Index data early Friday for further direction.
EUR/USD extended its weekly rally, reaching its highest level since mid-March at around 1.0950 on Wednesday. However, the pair corrected downward on Thursday, trading modestly lower around 1.0930. The European Central Bank (ECB) is widely expected to keep monetary policy unchanged following its July meeting.
Gold prices, after setting a new all-time high above $2,380 on Wednesday, turned south and closed the day in negative territory. However, XAU/USD regained traction early Thursday, climbing above $2,470.
In summary, the USD faces renewed pressure amidst dovish Fed comments, while mixed data from global markets leads to varied performances in major currency pairs and commodities.
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