Forex Today: US Dollar on the back foot, eyes on US PPI data

Here is what you need to know on Friday, December 9:

The US Dollar continues to have a hard time finding demand amid retreating US Treasury bond yields on Friday with the US Dollar Index edging lower toward 104.50 after having closed the last two days in negative territory. The market mood remains upbeat on the last trading day of the week and US stock index futures trade modestly higher. The Producer Price Index (PPI) data for November will be featured in the US economic docket alongside the University of Michigan's preliminary Consumer Sentiment Survey for December.

Earlier in the day, the data from China showed that inflation, as measured by the Consumer Price Index (CPI), declined to 1.6% on a yearly basis in November from 2.1% in December. This reading came in higher than the market expectation of 1%. Meanwhile, China’s Premier Li Keiang said that the risk of a global recession was increasing but added that the Chinese economy was currently in a 'stable state' after reversing the economic decline in the third quarter. Nevertheless, The Shanghai Composite Index and Hong Kong's Hang Seng Index both remain on track to post daily gains.

EUR/USD gained 50 pips on Thursday and preserved its bullish momentum early Friday. The pair continues to edge higher toward 1.0600, where it will set a fresh multi-month high. European Central Bank (ECB) Governing Council member and French central bank governor Francois Villeroy de Galhau warned on Friday, “a temporary recession cannot be excluded," but these comments had little to no impact on the Euro's performance against its rivals.

GBP/USD registered small daily gains on Thursday and was last seen trading modestly higher on the day above 1.2250. The Bank of England will release the Consumer Inflation Expectations data later in the session.

USD/JPY closed virtually unchanged on Thursday and started to stretch lower toward 136.00 early Friday.

Gold price gained traction during the Asian trading hours on Friday and started to climb higher toward $1,800. The benchmark 10-year US Treasury bond yield is down nearly 1% on the day below 3.5%, helping XAU/USD preserve its bullish momentum.

Bitcoin continues to fluctuate in its weekly range at around $17,000. Ethereum gained nearly 4% on Thursday and was last seen consolidating its gains slightly below $1,300.