The US dollar gained ground against key global currencies on Wednesday morning as investors anticipated the release of crucial economic data and scheduled speeches from Federal Reserve officials.
Ahead of the S&P Global flash manufacturing and services purchasing managers’ index (PMI) estimates for April, the greenback made notable advances. A snapshot of the forex market showed the USDEUR pair dropping to 1.1402 from Tuesday’s close of 1.1421, and down from 1.1494 at the same time a day earlier.
Preliminary data released earlier in the day showed a slight improvement in the Eurozone’s manufacturing PMI for April, although the services PMI slipped below the expansion threshold.
Later data also revealed a sharp increase in the Eurozone’s trade surplus for February, even as construction output declined during the same period. European Central Bank (ECB) Executive Board member Philip Lane is scheduled to speak later on Wednesday. The next ECB policy meeting is set for June 4–5.
In the UK, the British pound lost strength against the dollar, with GBPUSD falling to 1.3302 from Tuesday’s US close of 1.3332, and below the 1.3368 mark seen that morning. Fresh data indicated that the UK’s manufacturing PMI dropped further into contraction territory in April, while the services sector also signaled a slowdown.
Upcoming remarks from Bank of England (BoE) Governor Andrew Bailey and BoE policy board member Sarah Breeden are expected to draw attention. The next BoE monetary policy meeting is scheduled for May 8.
Meanwhile, the dollar also appreciated against the Japanese yen, as USDJPY climbed to 142.1576, up from 141.6264 at Tuesday’s close, and significantly higher than 140.2654 earlier that morning. According to overnight figures, Japan’s manufacturing PMI ticked up slightly in April but remained in contraction, while the services PMI showed accelerated growth. The Bank of Japan will hold its next meeting between April 30 and May 1.
The USDCAD pair edged up to 1.3825 from 1.3824 at the previous US close but remained lower than the 1.3842 level recorded Tuesday morning. Investors are awaiting the release of Canada’s new home price data for March, while the Bank of Canada is scheduled to meet again on June 4.
