The dollar rose against a basket of currencies on Friday, paring some of the week’s losses, as a stronger-than-expected rise in the U.S and China’s inflation gauges drove up bond yields. The U.S. Dollar Currency Index, which measures the greenback against a basket of six currencies, was 0.156% higher at 92.218. We’re seeing a consolidation in the broad U.S dollar today after a week of losses as inflation data from China and the U.S sparks the U.S treasury curve back into life. Data on Friday showed U.S. producer prices increased more than expected in March, resulting in the largest annual gain in 9-1/2 years, fitting in with expectations for higher inflation as the economy reopens amid an improved public health environment and massive government funding. Inflation is expected to heat up this year, driven by pent-up demand and as the weak readings, last spring drop out of the calculation. Prices tumbled early in the pandemic amid mandatory closures of non-essential businesses across many states to slow the first wave of COVID-19 infections. Most economists and Federal Reserve officials believe higher inflation will be transitory because of labor market slack. Earlier on Friday, data showed China’s factory-gate prices beat analyst expectations and rose at their fastest annual pace since July 2018 in March, the latest sign that a recovery in the world’s second-largest economy is gathering momentum. The dollar was also helped by data showing a second straight monthly drop in industrial production in Germany, further boosting the likelihood of Europe’s biggest economy has contracted in the first quarter. Still, the dollar’s rally this year appears to have run out of steam. Despite Friday’s gains, the dollar index was on pace to finish the week down 0.8%, it's worst weekly showing this year. In short, the energy has gone out of the dollar’s first-quarter rebound, just as it has gone out of the bond sell-off. Sterling steadied on Friday, having touched a two-month low against the dollar in early London trading, and was set for its biggest weekly drop against the euro so far this year, hurt by profit-taking after a strong first quarter. The pound had its best quarter against the euro since 2015 in the first three months of 2021, boosted by the UK’s vaccine rollout, one of the fastest in the world, as well as a fading of negative interest rate expectations. Analysts also attributed its strengthening against the euro to an expectation that economic recovery in Britain would outpace that in the eurozone. Britain has surged ahead of the rest of Europe in the race to vaccinate its population, with almost half of its citizens receiving the first dose. But supply issues surrounding its main Oxford-AstraZeneca shot have slowed progress in recent days while Germany’s inoculation campaign has sped up.
Euro
The single currency rose in Friday’s trading session amid doubts about the ECB’s efforts to keep nominal interest rates low. The latest ECB minutes did not suggest a firm conviction that the central bank needs to suppress rates at all costs. The hawks are stretching their wings by making this the price of their support. Overall, the EUR/USD traded with a low of 1.1865 and a high of 1.1918 before closing the day around 1.1899 in the New York session.
Yen
The Japanese Yen poised for its largest weekly percentage gains in five months, while the dollar index, which has fallen 0.9% last week. The dollar had its softest week of the year as surprisingly weak U.S jobs figures and a determinedly accommodative Federal Reserve have prompted investors to trim bets on the greenback. Overall, the USD/JPY traded with a low of 109.19 and a high of 109.94 before closing the day around 109.64 in the U.S session.
British Pound
The British Pound steadied on Friday, having touched a two-month low against the dollar in early trading, and was set for its biggest weekly drop against the euro so far this year, hurt by profit-taking after a strong first quarter. The pound had its best quarter against the euro since 2015 in the first three months of 2021. Overall, the GBP/USD traded with a low of 1.3668 and a high of 1.3748 before closing the day at 1.3702 in the New York session.
Canadian Dollar
The Canadian Dollar advanced against its broadly stronger U.S counterpart on Friday as data showing the economy added far more jobs than expected in March offset lower oil prices, with the loonie also gaining for the week. Canada added 303,100 jobs in March, triple analyst Expectations. The Canadian economy keeps beating expectations. Overall, USD/CAD traded with a low of 1.2522 and a high of 1.2608 before closing the day at 1.2530 in the New York session.
Australian Dollar
The Australian Dollar fell in Friday’s trading session due to worries about a slowdown in Australia’s coronavirus vaccine rollout. Australia has restricted the use of the AstraZeneca COVID-19 vaccine - on which it had largely based its vaccination program due to risks of blood clots. For the week, the Aussie gained 0.3%, its first increase since the week of March 12. Overall, AUD/USD traded with a low of 0.7598 and a high of 0.7675 before closing the day at 0.7612 in the New York session.
Euro-Yen
EUR/JPY is trading above 14, 50, and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 62 and lies above the neutral zone. In general, the pair has gained 0.25%.
Sterling-Yen
Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 51 reading and lies above the neutral zone. On the whole, the pair has gained 0.15%.
Aussie-Yen
Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 52 reading and lies above the neutral region. In general, the pair has lost 0.09%.
Euro-Sterling
This cross is currently trading below 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 58 and lies below the neutral region. Overall, the pair has gained 0.12%.
Sterling-Swiss
This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 48 and lies above the neutral region. In general, the pair has lost 0.20%.
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