Home Business News PMI data moves the forex market

The dollar is recovering today after three days of cumulative losses. The US currency followed the developments of treasury yields which saw 10-year yields fall after briefly breaching the 5% level before rebounding again.

Traders could remain cautious ahead of several important economic data releases this week and the Federal Reserve’s interest rates decision next week.

While it was able to rebound during the last couple of days, the euro retreated today as a result of continued deterioration in economic activity in the euro area.

PMI data for the euro area and Germany came up weaker than expected overall, weighing on sentiment. The ECB’s interest rate decision this week could also strongly affect the currency’s direction.

The pound continued to see volatile trading as traders reacted to UK economic data. The currency retreated on weak PMI data and changing expectations regarding the Bank of England’s monetary policy.

The GBP could continue to see some uncertainty during the few days remaining until the central bank’s meeting.

The Japanese yen reacted to the stronger-than-expected inflation data in Japan as well as to the concerns about a potential intervention from the Bank of Japan. The probability of the latter could increase if the dollar strengthens.

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