The dollar is consolidating yesterday's losses as the month-end approaches and ahead of the release of US income and consumption data. After hitting a five-day low against the yen near JPY156.40, the dollar has rebounded to around JPY157.30 in late European morning trading. The euro is gaining traction following a strong year-over-year CPI reading, while sterling remains relatively stable, trading just above $1.2700.

US index futures are trending lower, suggesting the S&P 500 and NASDAQ may end their five-week winning streak unless a significant recovery occurs today.
Gold remains steady around $2342, up from its settlement near $2324 last week. July WTI crude, which settled near $77.70 last week, has traded between $77.50 and $80.60 this week, with today's low at $77.50.

Asia Pacific Markets
Recent Japanese economic data indicates a recovery following the Q1 contraction. However, industrial output unexpectedly dipped by 0.1% in April after a 4.4% rise in March. Retail sales surged, exceeding expectations, and the unemployment rate held steady at 2.6%.
The yen's persistent weakness bolsters market expectations that the Bank of Japan (BOJ) will raise rates by 10 basis points at the end of July. The market showed caution as the dollar neared JPY158.
Data from the BOJ confirmed interventions totaling JPY9.8 trillion (~$62.2 billion) over the past month, aligning with market expectations.

The Australian dollar is trading within a narrow range today, between $0.6625 and $0.6650.

European Markets
The rise in the eurozone's May CPI is largely seen as irrelevant, with the European Central Bank (ECB) expected to proceed with its first rate cut next week.
The euro surged and traded robustly throughout the European and North American sessions, reaching session highs near $1.0845 and touching $1.0850 in European morning trading.

Sterling approached support near $1.2675, recovering to nearly $1.2750 yesterday, and is now trading in a narrow range of $1.2700 to $1.2735.

American Markets
In the current cycle, the US CPI has overshadowed the PCE deflator, which is the Federal Reserve's preferred inflation measure. Economists, leveraging CPI and certain PPI components, can forecast the PCE deflator more accurately than the CPI itself. The headline and core PCE deflators are expected to remain unchanged from March, at 2.7% and 2.8%, respectively.

The US dollar retraced most of Wednesday's gains against the Canadian dollar on Thursday and has marginally extended this move today, hitting a low just below CAD1.3655.