GBPUSD stays pressured on firmer US Dollar, yields

Market players tread water early Thursday as an absence of major data/events joins a cautious mood ahead of today’s US Retail Sales and Producer Price Index (PPI).

It’s worth noting, however, that the US Dollar remains on the way to posting the first weekly gain in four, edging higher of late, as traders prepare for next week’s US Federal Reserve (Fed) monetary policy meeting, likely hawkish due to the recent upbeat US inflation.

While the US Dollar grinds higher, the Gold price retreats within the weekly trading range but the crude oil remains firmer.

That said, EURUSD eases on downbeat EU industrial production while GBPUSD holds lower grounds amid mostly downbeat UK data and a lack of confidence in the Bank of England (BoE) policymakers’ hawkish rhetoric.

On the other hand, USDJPY traces firmer yields whereas AUDUSD and NZDUSD seesaw within the latest ranges as commodities and Antipodeans lack bullish momentum due to China woes, as well as due to the US Dollar’s rebound.

BTCUSD refreshes record high near $74,000 but the ETHUSD lacks bullish momentum near the recently flashed multi-year high.

amid an influx of funds into the spot ETFs ahead of the Bitcoin halving event. However, the ETHUSD lacks bullish momentum and seesaws near the multi-year high as traders seek more clues from Ethereum traders to defend the latest run-up.

Following are the latest moves of the key assets:

• Brent oil remains mildly bid near $84.60 after rising the most in five weeks the previous day.
• Gold price retreats to $2,167 while fading the previous day’s recovery, bracing for the first weekly loss in four.
• USD Index prints mild gains around 102.90 while preparing to snap a three-week downtrend.
• Wall Street closed mixed while the Asia-Pacific stocks edged lower. Further, the shares in Europe and the UK remained depressed during the initial hour.
• BTCUSD refreshes an all-time high near $74,000 but ETHUSD prints mild losses around $3,970.

US Dollar rebounds ahead of consumer-centric data…

The US Dollar Index (DXY) appears well-set to defy the three-week-old downtrend as the US inflation data bolstered calls for the Federal Reserve’s (Fed) delayed rate cuts. The same joins the market’s cautious mood to weigh on the Antipodeans and commodities amid a sluggish day ahead of a slew of the US data.

Also allowing the greenback gauge to remain firmer, as well as exert downside pressure on commodities and Antipodeans, are the debt woes in China and softer statistics from India, the world’s top two gold customers. With this, the DXY prints minor gains around 102.90 while tracking upbeat performances of the benchmark US Treasury bond yields.

It should be noted that policymakers in Beijing are trying hard to conquer the challenges for the world’s second-biggest economy, especially amid the dwindling real estate market. On the same line are the doubts about India’s 8.0% GDP growth amid a recent softening in the headline inflation data.

However, the traders appear to have made peace with the broad rate cuts from the top-tier central banks in June and hence the commodity and crypto buyers remain hopeful of refreshing the all-time highs. However, the traders are likely preparing for next week’s Fed monetary policy that is expected to reiterate the hawkish bias and push back the need for immediate rate cuts.

Elsewhere, the UK’s NIESR GDP Estimate for three months ending in February matched the expected improvement of 0.0% from -0.1% prior whereas the monthly GDP grew 0.2% MoM for January compared to -0.1% prior and the market forecasts of 0.2%. The same joined a pullback in the US Dollar to allow the GBPUSD pair to end on a positive side even if the downbeat prints of the UK’s Manufacturing Production and Industrial Production, as well as the higher trade deficit, tested the Cable buyers.

On the same line, the EURUSD pair also fades the early-week recovery as mixed data from the bloc raises doubts about the European Central Bank (ECB) officials’ concerns about a delay in the rate cut. Moving on, USDJPY bears also reassess the odds of the BoJ’s early exit from the ultra-easy policy and pare recent downside as policymakers defend the dovish bias.

BTCUSDD renews the record high amid an influx of funds into the spot ETFs ahead of the Bitcoin halving event. However, the ETHUSD lacks bullish momentum and seesaws near the multi-year high as traders seek more clues from Ethereum traders to defend the latest run-up.

• Strong buy: USDCAD, USDJPY
• Strong sell: Crude Oil, US Dollar, GBPUSD
• Buy: BTCUSD, ETHUSD, Nasdaq, Gold
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

US Retail Sales, PPI, Jobless Claims eyed…

With the early-week US inflation being support of the US Dollar’s corrective bounce, today’s US Retail Sales, Jobless Claims and Producer Price Index (PPI) could allow the US Dollar to defend the weekly gains by posting upbeat outcomes. Meanwhile, the negative surprises won’t necessarily drown the US Dollar, apart from giving an intermediate pullback, as there will be more US data on Friday and next week’s FOMC is likely to offer a positive push to the Greenback. Hence, the US Dollar’s rebound is likely to prevail irrespective of the data unless the outcomes appear extremely downbeat.

May the trading luck be with you!