Although market movements appeared limited in trading yesterday Wednesday, the US dollar was still seen to be showing a recovery as tensions in the market eased.
The development of the tariff war at this time shows positive signs as the President of the United States (US) began to be open to negotiations.
The Trump administration signaled for negotiations with China to reduce the tension of the trade war between the two world giants.
US Treasury Secretary Scott Bessent stated that the excessively high tariff settlement between the US and China was unstable, while President Trump began to show his openness to negotiations.
In addition, the news that Trump withdrew his threat to fire Federal Reserve (Fed) Chairman Jerome Powell also eased concerns about the internal conflict in America before.
After a lack of economic data that was in focus since the beginning of the week, investors on Wednesday began to pay attention to the manufacturing and services PMI output to assess the current health of economic activity.
In the European session yesterday, the focus was on the PMI data for Germany which showed mixed readings for both sectors.
Similar data for the UK that followed later showed no significant difference to the latest reading for April.
PMI data for the US showed a return to above 50 for the manufacturing sector, while the services sector declined slightly but still remained above 50.
Overall, the manufacturing sector showed positive expansion but a slight decline was recorded for the services sector in major economies.
For today's data focus (Thursday), the German ifo business climate survey will be watched in the European session and in the following session, the US unemployment claims data will influence the movement of the US dollar.
As the US dollar strengthened again, the Yen was seen reducing its previous gains as the appeal of the safe-haven currency began to weaken.
In addition, the International Monetary Fund (IMF) expects the Bank of Japan (BOJ) to delay further interest rate hikes due to uncertainty triggered by tariffs.
