Forex Today: Dollar consolidates after heavy losses, remains vulnerable

A quiet Asian session is ahead regarding economic data that could help the US Dollar stabilize after posting heavy losses on Thursday on the back of inflation and employment US data. On Friday, the key report will be the US March Retail Sales. 

Here is what you need to know on Friday, April 14:

The US Dollar tumbled again, breaking technical and psychological support levels. At the same time, US stocks soared. The Dow Jones ended with a gain of 380 points or 1.15%, while the Nasdaq jumped by 1.99%. The VIX posted the lowest close since February. Big US banks will announce Q1 earnings on Friday. 

On Wednesday, the US Consumer Price Index report showed that annual inflation eased to 5% in March, the lowest in two years, but the core rate remained elevated. On Thursday, data showed that wholesale inflation fell more than expected. The annualized Producer Price Index (PPI) inflation dropped from 4.9% to 2.7%, below the 3% expected, the smallest since January 2021. The latest round of data showed that inflation continues to slow down. 

US Initial Jobless Claims rose to 239K, above the 232K expected, the highest level since January 2022. The report added signs of a softer labor market. More data is due on Friday with Retail Sales, Industrial Production and Consumer Confidence figures. Upbeat economic reports could help the US Dollar, but the trend is still down. Unless, good news triggers risk appetite and weighs further on the Greenback. 

US Retail Sales Preview: Dollar set to jump above low barrier of expectations, three scenarios  

EUR/USD posted the first daily close above 1.1000 in a year, helped by a firmer Euro and the sharp slide of the US Dollar. EUR/GBP gained for the third consecutive day, rising to the highest level in weeks above 0.8800. 

USD/JPY fell for the second day in a row, although it trimmed losses during the American session, rebounding above 132.50. The improvement in market sentiment weighed on the Japanese yen. 

GBP/USD rose for the third consecutive day and posted the highest daily close since June, above 1.2500. Data from the UK showed GDP was unchanged in February, against expectations of a 0.1% expansion. Bank of England’s (BoE) Silvana Tenreyro will participate in a panel on Friday at the International Monetary Fund Spring Meetings about how to fight inflation. At the last BoE meeting she voted to keep rates unchanged. 

AUD/USD jumped toward 0.6800 and NZD/USD hit levels above 0.6300 amid a weaker US Dollar. The Kiwi outperformed. Early on Friday, the March Business NZ PMI is due. USD/CAD tumbled to 1.3340, a 2-month low. 

USD/CHF confirmed the breakout of long-term support levels and extended the decline to 0.8854, the weakest level since January 2021. Switzerland will release wholesale inflation on Friday. 

Gold continued its run toward record highs, rising above $2,040, while Silver approached $26.00. Bitcoin also benefited from the better mood across financial markets and retook $30,000.