The US dollar retreated on Thursday as Federal Reserve officials highlighted growing economic risks from tariffs. Fed Governor Waller and Cleveland Fed’s Hammack emphasized patience amid uncertainty, while mixed U.S. data—declining home sales and rising jobless claims offset by strong durable goods orders—added complexity. Traders anticipate month-end flows could briefly support the dollar index around the critical 100 level.

Euro Holds Gains Despite ECB Caution

EUR/USD maintained modest gains, trading within a tight 1.1320–1.1395 range despite dovish remarks from ECB policymakers Simkus, Nagel, and Rehn. ECB’s Lane indicated room for traditional rate cuts, while Germany lowered growth forecasts amid prolonged tariff uncertainty. Technicals show key resistance at 1.1440, with support at 1.1264.

Sterling Advances, Awaiting UK Data

GBP/USD cautiously strengthened, trimming gains after BoE Governor Bailey reiterated tariff-related economic risks. Resistance near 1.3423 capped moves, with support near 1.3260. Investors await Friday's UK retail sales data for short-term direction.

Yen Rangebound; Trade Talks in Focus

USD/JPY remained subdued within a narrow range, influenced by improved equities and suppressed volatility. Markets await Tokyo’s April CPI and Japan-U.S. trade talk outcomes, amid reports Japan may purchase U.S. soybeans. Technical breakout levels are 141.60 (support) and 144 (resistance).

Commodity Currencies Outperform; Yields Drop

Risk-sensitive currencies like NZD and NOK led gains amid positive sentiment. Treasury yields fell 6-9 basis points, stabilizing the yield curve at around +51.4bp. Commodities were mixed; oil rose modestly (+0.66%), gold gained sharply (+1.7%), and copper edged higher (+0.54%) on cautious optimism around global demand.

Currencies at close: EUR/USD +0.65%, USD/JPY -0.63%, GBP/USD +0.64%, AUD/USD +0.74%, Dollar Index -0.56%.