The US dollar’s recent downward trend has come to a halt, in line with financial institution ING’s forecasts. Analysts noted that U.S. economic data has not provided enough momentum to push a significantly weaker dollar at this time.
This comes after jobless claims fell to 222,000 from the previous week’s increase of 232,000. The job market showed a similar pattern in January, peaking at 225,000 applications before falling to 200,000-210,000.
ING expects potential stabilization in USD currency pairs ahead of the release of the April Personal Consumption Expenditures (PCE) price index on May 31. The firm suggests that volatility across assets could remain subdued in the coming weeks, aiding the search for carry trades.
As a result, he expresses a lack of optimism for a recovery in the Japanese yen, currently considered the most attractive funding currency.
In related developments, China’s latest economic data has influenced market sentiment. The country reported a 6.7% year-on-year increase in industrial production in April, beating forecasts of 5.5%.
However, retail sales fell short of expectations, recording growth of 2.3% versus the expected 3.7%. According to the ING economist, the data reflects the continued caution of households and the private sector in China.
Today’s US economic calendar features the leading index, which is expected to remain at -0.3% in April. Additionally, Federal Reserve officials Chris Waller, Neel Kashkari and Mary Daly are expected to speak. ING expects the dollar index (DXY) to move in the 104-105 range in the near term.
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