US Dollar struggles as market sentiment improves: Forex Today

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US Dollar struggles as market sentiment improves: Forex Today

The US dollar struggled to find demand on Friday as market sentiment improved, causing the dollar to lose its resilience against its major rivals. European inflation data and the University of Michigan's Consumer Sentiment Survey are expected to be released today, along with the US Federal Reserve's Industrial Production data for March. Meanwhile, the European Central Bank raised its key rates by 50 basis points following its March policy meeting as expected. Although ECB President Christine Lagarde refrained from committing to additional big rate hikes in the near future, she reassured markets that the banking sector in the Eurozone was in good condition.

USD/JPY came under modest bearish pressure and declined toward 133.00 on Friday. Bank of Japan (BoJ) Governor Haruhiko Kuroda said that it would be possible to further lower short-term interest rates from minus 0.1%, but added that he cannot comment on to what extent. The Nikkei Asian Review reported that the Japanese Government, the BoJ and the Financial Services Authority (FSA) will meet later this evening to assess the financial market situation in Japan.

The Reserve Bank of New Zealand (RBNZ) announced that all New Zealand banks are currently operating above their minimum regulatory requirements. The NZD/USD gathered bullish momentum on this headline and advanced towards 0.6250. On the other hand, gold prices remained virtually unchanged on Thursday as rising US Treasury bond yields did not allow XAU/USD to capitalize on the renewed US dollar weakness.

Finally, Bitcoin benefited from the risk-positive market environment and traded around $26,000 on Friday, rising nearly 4% on the day. Ethereum continues to stretch higher and trades above $1,700 in the European morning following Thursday's rebound. Overall, investors will be closely monitoring today's economic data releases for fresh impetus, with the US dollar expected to remain under pressure against its rivals.

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