FX round-up: US dollar strengthens as commodities slip, risk appettite wanes

The greenback clawed back some ground on Thursday despite a rather mixed spate of economic data in the States, after the European Central Bank left the door open to further stimulus should it be deemed necessary.

As of 16:00BST euro/dollar was drifting lower by 0.06% to 1.1290, albeit after having traded in wide range in the wake of Draghi’s press conference.

Dollar/yen was modestly weaker, slipping 0.35% to 109.47.

Cable on the other hand was a bit of an outlier, edging higher by 0.06% to 1.4341 despite a weaker than expected reading on UK retail sales for the month of March.

Market chatter referencing smaller than perceived risks on the back of some recent poll results and a spike in 10-year Gilt yields following revised debt issuance plans from the DMO appeared to buoy sterling during the session.

Stateside, initial unemployment claims fell by 6,000 in the latest week to reach 247,000 – their lowest reading since 1973.

In parallel, the Federal Reserve bank of Philadelphia’s regional manufacturing gauge fell from 12.4 in March to -1.6 in April, with a sub-index of employment retreating to its weakest level since July 2009.

Analysts at Pantheon Macroeconomics gave short shrift to both sets of data, arguing that difficulties in adjusting the figures for the impact of Easter were likely behind the unusually positive and negative readings, respectively.

Acting as a backdrop, there was a slightly ‘risk-off’ tone to markets as front month oil futures succumbed to profit-taking after several days of gains.

That saw the US dollar gain 0.42% to 1.2709 versus the Canadian dollar while the Aussie was slipping 0.32% versus the Greenback.