With key PMI data releases on the horizon, the market is assessing whether the U.S. dollar will remain at elevated levels

With key PMI data releases on the horizon, the market is assessing whether the U.S. dollar will remain at elevated levels

21.05.2026 New

In the previous session, the U.S. dollar traded near its highs after the FOMC minutes indicated that further tightening could be appropriate if inflation remains elevated. The USD/JPY pair fluctuated within a range of 158.58 to 159.18 before closing around 158.89, with resistance likely to be felt near the 159.00 level.On the downside, the focus will likely be on whether the area between 158.50 and 158.00 acts as support. With U.S. initial jobless claims, flash PMI data, and housing-related indicators scheduled for today, we will be watching to see if the U.S. dollar continues to trade near its highs.

European currencies saw the euro struggle to find direction against the dollar, as the eurozone’s April Harmonized Index of Consumer Prices (HICP, revised) came in at 3.0% year-on-year—above the ECB’s target—while the strengthening U.S. dollar weighed on the market. The euro/dollar pair traded within a range of 1.1583 to 1.1646 before closing near 1.1625.The immediate focus is on whether the pair can break above the 1.1650 level, while on the downside, the 1.1600 to 1.1580 range is likely to be closely watched. With flash PMI figures for France, Germany, the Eurozone, and the UK due out in quick succession today, we will be watching to see how European currencies react to these economic indicators.

Today’s economic indicators include the preliminary May PMI for France’s manufacturing and services sectors at 4:15 p.m., the preliminary May PMI for Germany’s manufacturing and services sectors at 4:30 p.m., the preliminary May PMI for the eurozone’s manufacturing and services sectors and the March current account balance at 5:00 p.m., the preliminary May PMI for the UK’s manufacturing and services sectors at 5:30 p.m.,21:30 US Initial Jobless Claims (previous week), the Philadelphia Fed Manufacturing Index, Housing Starts, and Building Permits; 22:45 US May Manufacturing, Services, and Composite PMI Flash Estimates; 23:00 Eurozone May Consumer Confidence; and 24:00 remarks by Bank of England (BOE) Governor Bailey.In particular, during European trading hours, national PMIs are likely to be key drivers, while during New York trading hours, U.S. employment, housing, and PMI-related indicators are likely to be key drivers; we should carefully monitor the reactions of the euro, pound, and U.S. dollar.