Forexlive Americas FX news wrap: Softer PMI weighs on US dollar

• S&P Global services PMI 50.9 vs 52.0 expected
• US March new home sales 0.693m vs 0.670m expected
• Richmond Fed Manufacturing index -7 versus -7 estimate
• Texas Instruments reports earnings of $1.20 versus $1.07 expected
• Visa reports earnings: EPS 2.51 vs 2.44 estimate. Company sees ‘stable consumer spending’
• Tesla earnings: EPS $0.45 vs $0.51 estimate. Revenues $21.3B vs $22.31B estimate
• US sells 2-year notes at 4.898% vs 4.904% WI
• JPMorgan CEO Dimon: There is a chance stagflation could happen again
• ECB’s Nagel: Need to be convinced that inflation is heading back to target before cuts
• Philly Fed April non-manufacturing index -12.4 vs -18.3 prior

Markets:

• WTI crude up $1.44 to $83.33
• US 10-year yields down 1.6 bps to 4.60%
• S&P 500 up 1.2%, Nasdaq up 1.6%
• Gold down $3 to $2322
• GBP leads, USD lags

The US dollar reversed lower after the softer PMI data. It was seen as a glimpse into a slowing economy and a sign that Fed rate cut hopes aren’t done yet.

EUR/USD quickly moved to 1.0700 from 1.0660 then traded sideways from there. The pound rose 65 pips to 1.2450.

Commodity currencies were also strong, supported by improved risk appetite.

Even the yen got some help from the PMI but the 25 pip drop in USD/JPY was quickly bought. A second dip after a strong US 2-year Treasury auction was also bought as the pair appears determined to test 155.00.

This article was written by Adam Button at www.forexlive.com.