Should We Be Wary of Further Downside Potential in the Weakening U.S. Dollar?
06.05.2025
- Eurozone Producer Price Index
- UK Services PMI
In the U.S. currency market yesterday, the U.S. dollar was the weakest performer despite the fact that the U.S. April ISM Non-Manufacturing Index, released yesterday, improved to 51.6 from 50.8 the previous month; this was due to the U.S. April PMI—for both the services sector and the composite index—coming in below expectations when released on the same day.The USD/JPY pair fell from 144.989 to 143.548, tracking a downward trend along the 20-period moving average (MA) on the hourly chart. On the weekly chart, the pair has once again pulled back without reaching the 10-period MA.
Among European currencies, the pound rebounded against the euro. The EUR/GBP pair fell from 0.8532 to 0.8502. It has moved from above the 20-period moving average (MA) on the hourly chart to below it.On the 4-hour chart, the pair is consolidating at lower levels along the 200-period EMA, while on the daily chart, it is currently searching for direction just below the 20-period MA. We will be watching closely to see if any clear price movement emerges during European trading hours.
Today’s economic indicators include Australian housing construction permits at 10:30, remarks by SNB Governor Schlegel of Switzerland at 16:35, the German non-manufacturing PMI at 16:55, the Eurozone non-manufacturing PMI at 17:00, the UK services PMI at 17:30,at 18:00, the Eurozone Producer Price Index; at 21:30, the U.S. Trade Balance and Canada’s International Merchandise Trade; at 23:00, Canada’s Ivey Purchasing Managers’ Index; and at 26:00, the U.S. 10-Year Treasury Auction. We should remain highly vigilant regarding the downside potential of the weakening U.S. dollar.
Author: Keisuke Sakurai
