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 April ISM Non-Manufacturing Index improving to 51.6 from 50.8 the previous month, as both the services and composite PMI figures for April, released on the same day, came in below expectations. The USD/JPY pair fell from 144.989 to 143.548, tracking a downward trend along the 20-period moving average on the hourly chart.On the weekly chart, the pair has once again fallen short of reaching the 10-day moving average.
Among European currencies, the pound rebounded against the euro. The EUR/GBP pair fell from 0.8532 to 0.8502. On the hourly chart, the price has moved from above the 20-period moving average (MA) to below it. On the 4-hour chart, the price is finding support along the 200-period exponential moving average (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 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, the Eurozone producer price index at 18:00, and the U.S. trade balance at 21:30,Canada’s International Merchandise Trade, 11:00 PM for Canada’s Ivey PMI, and 2:00 AM for 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
