Forex Today: US Dollar weakens in eventful "Yentervention" day
Here is what you need to know for Friday, May 1:
The US Dollar Index (DXY) declined sharply to around 98.10 on Thursday after data showed the United States (US) economy grew at a lower-than-expected pace in the first quarter and amid Japanese authorities' first intervention in the foreign exchange market in almost two years.
US Gross Domestic Product (GDP) grew at an annualized rate of 2% in the first quarter, accelerating from the meager growth seen at the end of 2025 but still somewhat lower than the 2.3% expected. In labor news, the US Department of Labor reported that new unemployment insurance applications dropped to 189K for the week ending April 25, the lowest in nearly 60 years, compared to an expected steady reading of 215K.
Still, the broadly upbeat data, particularly Jobless Claims, fail to support the US Dollar in a trading day that was marked by Japan's efforts to prop up the Yen.
USD/JPY plummeted towards the 156.50 price zone after Japan’s Nikkei newspaper confirmed that the Japanese government intervened to buy yen and sell dollars following the pair's break through the 160 mark. Before the confirmation, top Japanese officials had already warned about a possible intervention in markets.
EUR/USD rose slightly to the 1.1730 price region after the European Central Bank (ECB) left its deposit rate unchanged at 2%.Various Eurozone countries released the Consumer Price Index (CPI), Gross Domestic Product (GDP), and the Harmonized Index of Consumer Prices (HICP) on Thursday. Generally, the data was pretty upbeat, helping the Euro (EUR) push higher.
GBP/USD surged to a near three-month high near the 1.3610 level, after the Bank of England (BoE) left interest rates unchanged at 3.75% with an 8-1 vote, as expected.
AUD/USD is near a two-week high near the 0.7200, benefiting from data showing a resilient Chinese economy and a weaker US Dollar (USD) overall.
Gold advanced modestly towards the $4,620 price zone as investors looked away from the US Dollar (USD), though gains were capped as market players preferred riskier positions.
West Texas Intermediate (WTI) fell slightly to $102 per barrel after having posted a three-week high of $107 per barrel earlier in the session.
What’s next in the docket:
Friday, May 1
- Australia Q1 Producer Price Index
- Switzerland March Retail Sales
- Canada April Manufacturing PMI
- US ISM Manufacturing PMI
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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