Forex Today: Middle East uncertainty keeps volatility contained
Here is what you need to know on Friday, April 24:
The action in financial markets remains subdued on Friday and major currency pairs trade in narrow ranges. In the second half of the day, the University of Michigan will publish a revision to the April Consumer Sentiment Index data, while investors will keep a close eye on headlines coming out of the Middle East.
United States (US) President Donald Trump announced on Thursday that the Israel-Lebanon ceasefire will be extended by three weeks following the last round of talks at the White House. Later, President Trump told reporters in the Oval Office that he doesn't want to rush himself when it comes to reaching a final agreement with Iran. In the meantime, Trump ordered the US military to "shoot and kill" any Iranian vessels laying mines in the Strait of Hormuz. It's still unknown whether the US and Iran will hold talks in the near term or for how long the ceasefire will remain in place.
Wall Street's main indexes closed in negative territory on Thursday and the US Dollar (USD) Index registered gains for the third consecutive day. Meanwhile, the data from the US showed that the business activity in the private sector continued to expand at a healthy pace, with the S&P Global Composite Purchasing Managers' Index (PMI) rising to 52 in April's preliminary estimate from 50.3 in March. In the European session on Friday, the USD Index holds steady at around 98.80 and US stock index futures trade mixed.
The UK's Office for National Statistics reported on Friday that Retail Sales rose by 0.7% basis on a monthly basis in March. This print followed the 0.6% contraction recorded in February and came in better than the market expectation for an increase of 0.2%. GBP/USD largely ignored this data and was last seen trading virtually unchanged on the day at around 1.3470.
EUR/USD moves sideways below 1.1700 and remains on track to end the week in negative territory. The data from Germany showed that the IFO - Current Assessment Index declined to 85.4 in April from 86.7 in March.
Gold (XAU/USD) lost about 1% on Thursday and failed to stage a rebound in the Asian session on Friday. In the early European session, XAU/USD fluctuates in a narrow band below $4,700.
USD/JPY registered small gains on Thursday and came within a touching distance of 160.00 early Friday, before retreating toward 159.60. Japan's Finance Minister Satsuki Katayama noted that officials are in close contact around the clock with their US counterparts over speculative moves that are keeping the Japanese Yen (JPY) weak. Katayama confirmed that there are no plans to alter Japan's currency swap lines with the US.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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