The US Dollar slipped during Asian trading hours on Thursday, falling below 104.00 as risk sentiment improved. Investors are closely watching Manufacturing and Services PMIs for Germany and the Eurozone, as well as PMIs for the UK and the US.
In the January policy meeting minutes, the Federal Reserve expressed caution about moving too quickly to ease policy, emphasizing the need to assess incoming data carefully. While the USD initially rose in response, it later declined as risk appetite grew, with Nasdaq futures up over 1.5% on positive Nvidia earnings.
EUR/USD saw bullish momentum, reaching towards 1.0850, its highest level in nearly three weeks. PMI surveys for the Eurozone and Germany are expected to indicate ongoing contraction in business activity.
GBP/USD continued its upward trend, trading above 1.2650 after two consecutive days of gains. In Australia, the Judo Bank Composite PMI rose to 51.8 in February, signaling growth in the private sector and boosting AUD/USD towards 0.6600.
Meanwhile, Japan’s Jibun Bank Services PMI slightly decreased, and Manufacturing PMI fell. Despite USD weakness, USD/JPY remained stable above 150.00.
USD/CAD experienced minor losses on Wednesday before declining sharply towards 1.3450 in the Asian session on Thursday. Retail Sales data for December from Statistics Canada is awaited.
Gold prices remained largely unchanged on Wednesday despite USD weakness. Although XAU/USD saw modest gains early Thursday, the influence of US Treasury bond yields limited its upside potential.