US Dollar edges up, paring some losses from PMI data miss

LONDON (April 24) The US Dollar (USD) is trying to recover on Wednesday after trading firmly in the red on Tuesday. The miss on the US Purchasing Managers Index (PMI) for both the Services and Manufacturing sectors triggered a sell-off which extended to Wednesday’s Asian trading session. With the start of the European session, the dust seems to settle and seem to be considering the data miss as a one-off. Going forward, the US Gross Domestic Product (GDP) data on Thursday and the US Personal Consumption Expenditures (PCE) Price Index release on Friday will drive the next moves for the US Dollar. 

On the economic data front, Wednesday’s calendar is relatively light but some data could be moving markets and the DXY US Dollar Index again. Durable Goods Orders data are due to be released, and after the PMIs disappointment, more downbeat numbers could extend doubts over the US exceptionalism. Depending on how far data would undershoot or deteriorate, a June cut might even be back on the table again by next week. 

Daily digest market movers: Durable Goods to the rescue

• The Indonesian Central Bank has raised its key policy rate from 6.00% to 6.25% while markets were looking for a hold or a rate cut.
• Chinese building conglomerate Country Garden has extended all its Yuan Bonds in order to avoid a local default.
• The US Senate has passed a $95 billion aid package for Ukraine, Israel and Taiwan.
• USD/JPY is ticking up again to 154.90, making a new multi-decade high. Bank of America has warned in a report on Wednesday that a forex intervention might be nearby. 
• At 11:00 GMT, the weekly Mortgage Bankers Application Index will be released. Last week, the index surged by 3.3%, with no forecast pencilled in.
• At 12:30 GMT, the preliminary Durable Goods print for March will be released:
  • Headline orders grew by 1.3% in February, with no forecast for March..
  • Orders without transportation, a widely followed indicator by markets, are expected to increase at a steady rate of 0.3%.
• The US Treasury is heading to markets to allocate a 5-year Note.  
• It is another green day in equity markets, with Asian indexes broadly up by 2% and both European equities and US indices futures up by 0.50%.
• The CME Fedwatch Tool suggests June will still be a no-change to the monetary policy rate for the Federal Reserve by 84.8%, with September bearing a 46.7% probability for a rate cut against 31.6% for unchanged. 
• The benchmark 10-year US Treasury Note trades around 4.62%, near the low for this week.

FXStreet