Graphic Rewind: US Dollar Rises Temporarily on Dovish ECB Comments
- EUR/USD falls 50 pips on dovish commentary from 2 ECB members
- US Dollar loses steam following weak industrial production
A look back at the past 24 hours of Forex trading using movements in the US Dollar Index:
US Dollar 15-Minute 12:00 05/15 to 12:00 05/15 EST
The dollar index did not react significantly overnight to an impressive beat in Japanese economic expansion the first quarter, as the Bank of Japan remains focused on trying to raise inflation to its 2% target. USD/JPY jumped temporarily higher following the release, as Yen’s safe haven status often means it often fails to rise on improved economic news, even from its local economy.
The US Dollar moved 20 points higher and set a new 9-day high, as ECB members Mersch and Constancio both made comments implying that the central bank may further loosen policy through another rate cut or other non-conventional tools in the next meeting. The Euro declined over 50 pips against the US Dollar as London traders were coming online.
But the greenback’s gains were unwound in the New York session despite the announcement that annual inflation reached the Fed’s 2% target in April for the first time in 9 months. USD/JPY did not hold onto any gains following the CPI release, and the index fell back towards the daily open slowly after the release of industrial production below expectations.
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-- Written by Baruch Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.