Forex Today: Dollar rises modestly amid range-bound markets

Early on Thursday, New Zealand will report Q1 consumer inflation. No change is expected in Chinese benchmark lending rates. The National Australia Bank Business Confidence survey will be released, with consensus expecting a bounce back into positive territory in the first quarter. Japan trade figures are due. RBA Governor Lowe will present the independent review of the central bank. 

Here is what you need to know on Thursday, April 20:

A quiet Tuesday was followed by a volatile Wednesday across financial markets, with sharp bounces in currencies and metals. US equities wavered between gains and losses while the US Dollar rose modestly but retreated during the American session. 

The US Dollar Index gained 0.25% and settled near 102.00. It continues to move sideways as market participants see more rate hikes in May from the Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of England (BoE). China is expected to keep its benchmark lending rates unchanged on Thursday at 3.65%.

“Economic activity was little changed in recent weeks,” according to the Beige Book. US data due on Thursday includes the weekly Jobless Claims, the Philly Fed and Existing Home Sales. 

EUR/USD dropped toward 1.0900 and then bounced to test key short-term resistance at 1.0980. The trend is up, but in the short term, the pair continues to consolidate, awaiting the next catalysts. On Thursday, the European Central Bank will release the minutes of its latest meeting.

The Pound outperformed on Wednesday following inflation data from the United Kingdom, which boosted expectations of another rate hike from the Bank of England in May and potentially in June. The Consumer Price Index came in at 10.1% YoY in March, above the 9.8% of market consensus, while wholesale inflation also showed figures above estimates. As a result, GBP/USD jumped to 1.2473 and then plummeted to sub-1.2400 levels to close the day marginally higher at 1.2440. 

USD/JPY peaked above 135.00 and trimmed gains. However, it continues to move to the upside, above key daily moving averages, accompanying US yields. On Thursday, Japan will release trade data. 

NZD/USD is flat around 0.6200, supported by the 200-day SMA and capped by 0.6240, the confluence of the 20 and 55 SMAs. New Zealand Q1 inflation data is due on Thursday and will be relevant for expectations regarding the Reserve Bank of New Zealand (RBNZ). 

After rising on Tuesday following Canadian CPI data, the Loonie lagged on Wednesday. USD/CAD resumed the upside, climbing above 1.3450 to weekly highs. Bank of Canada (BoC) Governor Macklem offered nothing new in his Parliamentary testimony on Wednesday; he will return on Thursday. 

AUD/USD continued to move sideways around 0.6700. Reserve Bank of Australia (RBA) Governor Lowe will hold a press conference to discuss a review of the central bank’s structure; he is not expected to speak about the outlook of monetary policy. 

Gold finished lower but far from the daily low; it bottomed at $1,967 and then rebounded to $1,995 amid a retreat of the Dollar. Silver rose more than 2.5% from the bottom, retaking $25.00. Bitcoin erased Tuesday’s gains and tumbled more than 3% to $29,300.