The dollar fell sharply on Thursday, with the $-Index dropping -0.25% below 105.60, and all the so-called "reserve" currencies rising... except the yen, which dropped a further -0.15% to a new annual low of 155.50/$ (a new 34-year low).

The euro gained +0.3% to 1.0740, as did the Swiss franc to 0.9120, and sterling +0.4% to break the symbolic 1.2500 barrier.

Forex traders seem to have focused on the fall in US GDP (3.4% in Q4 2023, 1.6% in Q1 2024) rather than the rise in inflation (to 3.7% vs. 3.4% expected), which is pushing bond yields to new annual records.
US GDP figures for the first quarter, published on Thursday by the US Commerce Department, came out at the opposite end of the spectrum from the consensus: only +1.6% instead of the median estimate of +2.8%. Goldman Sachs had just raised its forecast to +3.2% (GDP came out half as high).... it's rare for 'GS' to be so wrong as to be completely 'upside down' from the trend).
But it gets worse, as underlying PCE inflation is said to have reached 3.7%, against the 3.4% expected by analysts.

The Euro did not suffer from the (slight) deterioration in business sentiment in France between March and April, with the Insee synthetic indicator dropping one point to 99, and thus returning to just below its long-term average (100).

This deterioration is the result of the less favorable economic situation in all sectors of activity, with the exception of retail trade. The manufacturing and services indices both fell by three points to 100.

With the greenback weakening, gold rallied 0.5% to $2,333, while silver gained +0.5% to $27.35.

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