Forex Today: US Dollar slides as risk mood improves, eyes on PMIs
Here is what you need to know on Thursday, February 22:
The US Dollar came lost its traction during the Asian trading hours on Thursday and declined below 104.00, pressured by the improving risk sentiment. HCOB Manufacturing and Services PMIs for Germany and the Eurozone, S&P Global/CIPS PMIs for the UK and the S&P Global PMIs for the US will be watched closely by participants.
In the minutes of the January policy meeting, the Federal Reserve said that most policymakers noted the risks associated with moving too quickly to ease the policy and emphasized the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to 2%. "Officials highlighted uncertainty around how long the restrictive policy stance would be needed," the publication further noted. Although the USD edged higher with the immediate reaction, it erased its gains as risk flows started to dominate the financial markets toward the end of the day. Early Thursday, Nasdaq futures are up more than 1.5% on the back of upbeat Nvidia earnings figures. Meanwhile, the benchmark 10-year US Treasury bond yield holds steady at around 4.3% after rising modestly on Wednesday.
US Dollar price this week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.54% | -0.36% | -0.14% | -0.62% | 0.08% | -1.18% | -0.42% | |
| EUR | 0.54% | 0.19% | 0.40% | -0.07% | 0.62% | -0.63% | 0.12% | |
| GBP | 0.36% | -0.18% | 0.23% | -0.26% | 0.41% | -0.82% | -0.07% | |
| CAD | 0.14% | -0.40% | -0.21% | -0.49% | 0.20% | -1.03% | -0.29% | |
| AUD | 0.64% | 0.09% | 0.28% | 0.50% | 0.69% | -0.53% | 0.21% | |
| JPY | -0.07% | -0.62% | -0.40% | -0.19% | -0.73% | -1.24% | -0.49% | |
| NZD | 1.17% | 0.63% | 0.81% | 1.03% | 0.55% | 1.23% | 0.74% | |
| CHF | 0.43% | -0.11% | 0.07% | 0.28% | -0.19% | 0.48% | -0.74% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
EUR/USD gathered bullish momentum and climbed toward 1.0850 early Thursday, toughing its highest level in nearly three weeks in the process. PMI surveys from the Euro area and Germany are forecast to show an ongoing contraction in private sector's business activity in early February.
GBP/USD continued to push higher after closing the previous two days in positive territory and was last seen trading a few pips above 1.2650.
The data from Australia showed on Thursday that Judo Bank Composite PMI improved to 51.8 in February's flash estimate from 49 in January, highlighting a pickup of growth momentum in the private sector. AUD/USD gained traction after this data and advanced toward 0.6600.
Jibun Bank Services PMI edged lower to 52.5 from 53.1 in Japan while the Manufacturing PMI declined to 47.2 from 48. Despite the broad USD weakness, USD/JPY holds relatively stable above 150.00 after weak PMI readings.
USD/CAD registered small losses on Wednesday before declining sharply toward 1.3450 area in the Asian session on Thursday. Statistics Canada will release Retail Sales data for December later in the day.
Gold failed to benefit from the selling pressure surrounding the USD and closed virtually unchanged on Wednesday. Although XAU/USD clings to small gains at around $2,030 early Thursday, the resilience of US Treasury bond yields caps the pair's upside.
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