Forex today: Dollar retains the bid as the cleanest of dirty shirts, but yen performs the best of G10

• Forex overnight was in consolidation in the main, with the dollar outperforming again, gold up due to some  risk-off flows and technical divergence, WTI steady and stocks and U.S. yields consolidating.  

 while the greenback maintained its title of the cleanest dirty shirt in the laundry basket as central bank sentiment and concerns about inflation targets will likely keep the G10’s on the backfoot.

“Policy-wise, the focus is now firmly on the RBA following the disappointing Q1 CPI report and whether it will cut interest rates when it meets next month. The RBNZ follow up the day after that,” analysts at ANZ Bank argued.  

Stocks and commodities

There was also a focus on earnings and around 80% of firms have beat estimates so far this season which has seen the benchmarks racking up record highs this month.  WTI oil was unchanged on Thursday, failing to support the oil sector higher with the price consolidating at US$65bbls. Gold was up 0.1% at US$1277/oz with risk skewed in its favour, albeit capped by the persistence on the 98 handle (DXY) of the greenback bulls.  

As for US yields, they followed suit of global yields coming in a bit softer and for the most part, the US 10yr treasury yield consolidated a multi-day decline between a sideways range of between 2.52% and 2.54%. The 2yr yields traded between 2.31% and 2.33%.  

U.S. data:

From U.S. data,  durable goods were up 2.7% m/m in March, stronger than the 0.8% increase expected.  

G10 currency action (Analysts at Westpac’s summary):

• “The best performer in the G10 was the Japanese yen, USD/JPY falling from 112.20 in Tokyo trade to 111.38 in London, a 2 week low. The Bank of Japan made only minor tweaks to its policy stance yesterday, even as it published lower GDP and CPI forecasts in its quarterly outlook.”
• “The worst G10 performer was the Swedish krona, which fell over 1% to a 2002 low after its central bank held its rate at -0.25% and backtracked on plans to tighten monetary policy.”
• “EUR slipped from 1.1160 to 1.1120 while GBP/USD was net little changed.”
• AUD/USD slipped from 0.7020 to 0.6988 – the lowest since 3 Jan – following the soft inflation data on Wednesday and the subsequent changes of RBA calls by many forecasters. But AUD/USD was able to recover to 0.7015 in the NY afternoon, leaving it unchanged over the day.”
• “NZD/USD surprisingly rose from 0.6580 – a four-month low – to 0.6640.”
• “AUD/NZD extended a multi-day decline from 1.0640 to 1.0577.”

Key notes from U.S. session:

• Wall Street sees the DJIA continue in its technical pull-back

• BTC is plummeting on cover-up of missing funds

• Key events ahead:

When is Japan’s Tokyo Core CPI and how could it affect USD/JPY?