The dollar's recovery, which began yesterday, has extended into today's trading. The greenback is gaining against all G10 currencies and most emerging market currencies, with the notable exceptions of the Indian rupee and Mexican peso.
In Asia, Japanese markets showed mixed results, while shares in South Korea, Taiwan, Australia, and New Zealand declined. Europe's Stoxx 600, which ended a nine-day rally yesterday, is down about 0.25% today. Meanwhile, US index futures are largely unchanged.
Gold is consolidating after reaching a four-week high near $2400 yesterday and is up around 1% this week. July WTI crude oil hit its weekly high yesterday at nearly $79.30 and is currently consolidating within yesterday's range.
The dollar's sell-off against the yen began in Europe on Wednesday, dropping from around JPY156.50 to a low of JPY153.60 yesterday during the local session. It then steadily recovered, reaching JPY155.50 before European markets closed. The greenback consolidated above JPY155.15 in the North American afternoon. When the Bank of Japan did not announce a reduction in bond purchases today, as it had on Monday, the dollar traded higher, approaching JPY156.
The spring European Commission forecast indicates that a fragile recovery is taking hold in the eurozone. The flash PMI for May, a key data point for the eurozone, is due next week.
The UK will also see the flash PMI, along with April CPI and retail sales data.
The euro, trading near its highest level in a couple of months, appears overvalued and is showing a heavier bias near $1.0840 in the European morning.
Sterling had recovered to the $1.2680 area before sellers reemerged, and it is now trading near yesterday's lows in late morning turnover in Europe.
Yesterday's series of US economic data continues to reflect a trend of weaker-than-expected performance. The momentum at the start of Q2 is flagging, underscored by downward revisions in the March data. Additionally, early May Federal Reserve surveys (Empire and Philadelphia) were softer sequentially and below the median forecasts in Bloomberg's survey.
Today, the focus is on the April Index of Leading Economic Indicators.