EUR/USD (a 4-hour chart)
The dollar fell against the yen and the British pound, but rose to the commodity currencies; it little changed against other major currencies. Fed's Dudley said that the growth rates would be relatively slow, but they would depend on the economy state. Between the end of the Fed's asset repurchase autumn and the first rate increase – it will take a considerable time period.
The euro was traded slightly lower on Germany manufacturing inflation weak data. Producer Price Index (PPI) fell in April by 0.1 % compared with the previous month, whereas no change was expected. In annual terms, manufacturing inflation fell by 0.9 % against decrease expectations by 0.8% - the producer price has been decreasing the ninth consecutive months in a roll.
The UK consumer price inflation positive report supported the demand for the GBP/USD pair. The final rate rose to 1.8 % on an annualized basis, exceeding the market participant’s expectations. As we noted in our previous review - unemployment reducing combined with a moderate rise in consumer confidence indicator from GfK indicates an increase in Albion inflationary pressure. Against this background, GBP/USD went up.
The Japanese stock market sales led to the USD/JPY lowering yesterday. Investors get rid of Japanese shares before the Bank of Japan monetary - credit policy meeting and amid this "bears" rushed to open short positions in the profit earning hope.