Forex Daily Recap – The Greenback Gains Built Over Mixed CPI Figures Drained Fully Post FOMC Meeting

US Dollar Index

The USD Index continued to perform range bound movements sustaining between 96.86 and 97.09 levels for two days in a row until the European trading session. The greenback weighed against the six major rival currencies opened on Wednesday morning near 97.00 levels. The index plunged several pips earlier the day after the Euro and GBP rose on the back of some sound reports.

Things turned upside down at around 12:30 GMT when the US Department of Labor Statistics reported mixed Consumer Price Index (CPI) results for March. Both the CPI YoY and MoM which excluded Food & Energy had reported merely 0.1 percent lower than the consensus estimation. The March CPI Core and CPI (MoM & YoY), all these figures revealed some outstanding figures above the market expectation. Following this CPI event, US Dollar Index skyrocketed from 96.90 level reaching day’s fresh high of 97.21 level.

FOMC minutes revealed that the committee members believe the interest rates to remain unchanged until this year end. The members also added comments showing a weak outlook for the economy amid Brexit chaos and rising trade tensions. The greenback dropped again to 96.86 levels.

EUR/USD

After remaining in the consolidation phase the last day, the euro pair saw some good upward movements in the morning session. This upliftment in the pair developed hopes of marking new highs for the week. In the meanwhile, the February Industrial output data for France and Italy came out as “positive” when the street analysts expected “negative” numbers. These above consensus figures had helped the euro pair climb the upward rally reaching 1.1287 level.

The pair immediately reversed direction after the release of mixed US CPI reports and Draghi’s dovish stance on the economy. The EUR/USD which benefits the most among its peers on greenback plunge suffered today on the drastic escalation of USD Index. ECB President Mario Draghi reiterated stating a dovish outlook for the economy, and he added a down-tilt existence in the economic growth. The pair fell steeply from the day’s high of 1.1286 level landing near the lower vicinity of 1.1230 level, 56 pips down or 0.50 percent drop.

GBP/USD

After undergoing severe pullback the previous day, the Cable had a good trading session today. The pair started trading at around 1.3052 level and soared straight up touching day’s high of 1.3120 level. On the events front, the UK displayed some astounding above the consensus Industrial and Manufacturing Production numbers for February. The UK February Gross Domestic Product (GDP) MoM figures reported 0.2 percent as compared to the market expectation of 0.0 percent. Such impressive results helped the GBP/USD to reach the top levels faster.

The cable had dropped in the afternoon session on the rise of the greenback underpinned mixed US CPI reports. The pair regained upliftment after the NIESR March GDP Estimate for three months came around 0.4 percent higher than the consensus estimate of 0.0 percent. EU Summit on Brexit commenced at 16:00 GMT and discussions on approving May’s request for an Article 50 extension was currently in progress at the time of writing this article (18:00 GMT).

USD/CAD

The loonie pair opened up on Wednesday morning near 1.332 level. The USD/CAD pair made day’s high at 1.3360 level and fresh low near 1.3307 level. Oil prices had reached the five-month high price recently from where it dropped on the back of President Putin’s comments on resuming Oil productions.

However, the crude rose in the afternoon trading session amid rising geopolitical tensions. The EIA crude stock inventory change reports showed lower numbers than the consensus. This news along with the OPEC-led supply cut deepened the pain, making the Crude Oil WTI Futures to rebound near the previous high of $64.77 per barrel. The crude slump pushed down the USD/CAD pair making it land near 1.3305 levels.