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Dollar slides ahead of key GDP data

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The US Dollar is under modest selling pressure as investors gear up for key data releases. The US Bureau of Economic Analysis will publish the first estimate of the annualised gross domestic product (GDP) growth for the first quarter and the Department of Labor will release the weekly Initial Jobless Claims data.

Following Tuesday’s sharp decline, the USD Index registered small losses on Wednesday, supported by the upbeat Durable Goods Orders data for March.

Additionally, the cautious market stance further helped the currency stay resilient against its risk-sensitive rivals.

Early on Thursday, the USD Index remains in negative territory and is edging lower toward 105.50. The US economy is forecast to grow at an annual rate of 2.5% in Q1, following the 3.4% expansion recorded in the last quarter of 2023.

Meanwhile, US stock index futures stretched lower in early European trading and the 10-year US yield continues to fluctuate above 4.6%.

The EURUSD gained traction and climbed to its highest level in nearly two weeks above 1.0720, after closing virtually unchanged on Monday, while several European Central Bank (ECB) policymakers will be delivering speeches throughout the day.

GBPUSD closed the second consecutive day in positive territory on Wednesday and continued to push higher in the early European session on Thursday. The pair was last seen trading within a few pips of 1.2500.

USDJPY broke above 155.00 and reached its highest level in several decades above 155.50. The Bank of Japan will announce monetary policy decisions on Friday.

Gold closed with marginal losses on Wednesday. After edging lower toward $2,300 in Asian trading on Thursday, XAUUSD staged a rebound and was last seen trading above $2,320.

(Source: OANDA)