Forex Today: Markets now focus on PMI-day

The Greenback extended its recovery and pushed the USD Index (DXY) back to the 105.00 region amidst higher yields and in response to the hawkish tone from the FOMC Minutes.

Here is what you need to know on Thursday, May 23:

The USD Index (DXY) rose to multi-day highs near the 105.00 barrier supported by the tighter-for-longer narrative around the Fed. On May 23, the Chicago Fed National Activity Index is due along with usual weekly Initial Jobless Claims, New Home Sales and the advanced Manufacturing and Services PMIs for the month of May. In addition, Fed’s Bostic (Atlanta) is due to speak.

EUR/USD tumbled to five-day lows near the 1.0820 region, an area coincident with the provisional 100-day SMA. The preliminary Consumer Confidence tracked by the European Commission (EC) in the broader Euroland is due on May 23, ahead of May’s flash Manufacturing and Services PMIs.

GBP/USD clung to daily gains on the back of renewed repricing of rate cuts by the BoE in the wake of UK inflation data.  On May 23, flash Manufacturing and Services PMIs will be revealed prior to the speech by the BoE’s Pill.

Higher yields and the continuation of the rebound in the dollar lent extra legs to USD/JPY, which flirted with the area of three-week tops. On the domestic calendar, weekly Foreign Bond Investment are due on May 23, seconded by advanced Jibun Bank Manufacturing and Services PMIs.

AUD/USD retreated markedly to multi-session lows following the stronger dollar and the weak tone in the commodity space. The Consumer Inflation Expectations are next on tap in Oz on May 23 followed by the flash Judo Bank Manufacturing and Services PMIs.

Prices of the WTI dropped for the third straight session on the back of persistent dollar’s strength and expectations of delayed interest rate cuts by the Fed.

Gold prices added to Tuesday’s decline following hawkish FOMC Minutes, higher yields and a robust greenback. Silver followed suit and revisited three-day lows in the sub-$31.00 mark zone.