US Dollar Loses Wednesday’s Gains as Economic Data Turns to Worse

The US dollar rallied intraday on Wednesday thanks to positive economic reports released from the United States but lost its gains after US data turned to worse. The currency is trading flat against some rivals and lower against others as of now.

The dollar had been trading strong on Wednesday initially due to positive inflation and retail sales data, as well as the amazing Empire State Manufacturing Survey. Ye the currency weakened as data continued piling up, and new reports were not that good. Among them were the industrial production and capacity utilization report that showed an unexpected decline and the net long-term securities transactions that logged a negative figure, contradicting forecasters who were promising a positive one.

On a longer term, the greenback should continue to receive support from expectations of monetary tightening by the Federal Reserve. Tuesday’s testimony from Fed chief Janet Yellen reinforced such expectations. CME FedWatch page shows a 74% probability of an interest rate hike in June, up from 70% on Tuesday.

EUR/USD was down from 1.0575 to 1.0522 during the Wednesday’s session but rebounded to settle at 1.0599 and was trading at about 1.0613 as of 1:31 GMT on Thursday. GBP/USD was trading near today’s opening of 1.2460 following yesterday’s drop to 1.2385. USD/JPY slipped from 114.15 to 113.98.

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