The recent downtrend of the US dollar has halted, in line with the forecasts of financial institution ING. Analysts noted that US economic data did not provide enough momentum to push the dollar significantly lower at this time.
This comes after unemployment claims fell to 222,000 from the previous week's increase to 232,000. The labor market showed similar patterns in January, with claims peaking at 225,000 before falling to the 200,000 to 210,000 range.
ING expects potential stability in USD currency pairs as investors await the release of the April core Personal Consumption Expenditures (PCE) price index, scheduled for May 31. The company notes that volatility across assets may remain weak in the coming weeks, which may enhance the search for carry trades.
Thus, they express a lack of optimism about the recovery of the Japanese yen, which is currently considered the most attractive financing currency.
In related developments, the latest Chinese economic figures weighed on market sentiment. The country recorded a 6.7% year-on-year increase in industrial production in April, beating expectations of 5.5%.
However, retail sales performed less than expected, growing by 2.3% versus expectations of 3.7%. According to an economist at ING, the data reflects continued caution among households and the private sector in China.
Today's US economic calendar includes the leading indicator, which is expected to remain at -0.3% in April. Additionally, Federal Reserve officials Chris Waller, Neel Kashkari, and Mary Daly are scheduled to speak. ING expects (DXY) to trade within a range of 104-105 in the near term.
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