Central Bank Policies and Strong Dollar Dominate Markets

A hawkish stance from the U.S. Federal Reserve, which held its key interest rate steady, has provided broad support for the US Dollar against a basket of major currencies. Elsewhere, the European Central Bank and Bank of England are also expected to hold their policy rates, though the ECB has left the door open for potential summer hikes. This overarching theme of central bank hawkishness is being watched closely amid expectations for resilient U.S. economic growth.

Precious Metals Show Divergent Moves

Gold prices remained largely steady while silver regained some ground after touching a three-week low on Wednesday. The white metal's recovery occurred despite the broader market environment of a firming US Dollar and a hawkish tilt from the Federal Reserve.

Japanese Yen Weakness Sparks Intervention Concerns

The Japanese Yen continued to weaken significantly, with the USD/JPY pair rising past the 160.00 level to a multi-year high, prompting Japanese authorities to issue warnings about speculative moves and raising the risk of market intervention. A Bank of Japan report also highlighted that the inflationary impact from a weak yen could be more significant than that from an oil price shock.

Weak Economic Data Weighs on the Euro

The Euro faced downward pressure following the release of disappointing economic figures, particularly from Germany. German retail sales fell much more sharply than forecast in March, and the nation's unemployment level rose, signaling headwinds for Europe's largest economy. These factors contributed to the Euro's softness against the US Dollar and British Pound ahead of the ECB's policy decision.