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The dollar gained slightly on Friday’s European trade although upside traction may be limited by a recession outlook backed up by weaker data on Thursday from the US. Risk off mood on the day favoured the Japanese Yen. National core CPI from Japan was the same as previous backing the BoJ’s easy monetary policy stance. Flash PMIs from the US will be due later in the day.
GBPUSD tanked -0.32% from 1.2450 as the sterling lost traction following downbeat retail sales data. Retail sales month-on-month dropped from 1.1% to -0.9% in March resulting from the increased cost of living and rising food prices in the country. Flash PMIs from the UK were quite mixed with the manufacturing sector contracting to 46.6 from 48.5 and the services sector rising to 54.9 from 52.9. The dollar retraced some of its losses after Fed speak sounded slightly hawkish on rate hikes in May. Investors look ahead to the release of preliminary PMIs from the US for further clarity on the country`s economic health. The pair may seek 1.2350 lows in the near term.
EURJPY lost -0.32% as traders prefer the Japanese Yen amid risk aversion. The Yen soared despite disappointing PMI data which showed that the services sector grew less than anticipated at 54.9 vs 55.1 while the manufacturing sector slumped to 49.5 in April. Data from the Eurozone showed that Manufacturing PMI from Germany was worse than expected at 44.0 with the services PMI rising to 55.7. The S&P Global Composite PMI from the Euro area rose to 54.4 from 53.7 in April. Sellers moved below the 147.00 mark as the slide may give up 145.50.
CADCHF traded flat at -0.06% ahead of retail sales data from Canada. The data is surveyed to show a slowdown in consumer spending in February with the Core Retail sales month-on-month anticipated to drop to -0.1% from 0.9% while Retail sales month-over-month are expected to settle at -0.6% vs 1.4% in the previous read. The pair is currently sitting at an eight-year low at 0.6600 as sellers may find it difficult to break below. However, a move below will give bears 0.6500 immediate support.
European stocks traded in a mixed manner to the end of the week. The CAC40 rose +0.40% as buyers targeted 7600. UK 100 was up +0.39% above 7900 as bulls may seek 8000 and 8050 on an extended rise. The DAX lost -0.13% sliding towards 15 700 and 15 500.
US stock futures were quite subdued as the earnings season continues. The US 500 futures traded at +0.02% after retracing earlier losses to 4120. An extended rise may give 4150 in the short term. US 30 futures were up +0.08% after bouncing off 33 700 with bullish targets at 33 900. US 100 futures were down -0.04% after establishing a low at 12 950.
In commodities, gold trims down gains as the dollar resumed strength on revived Fed rate hike bets. XAUUSD lost -0.90% below the $2000 mark as it neared $1980. An extended slide may tank the precious metal to $1950.
