Ella 
In a noteworthy development, the USD/JPY currency pair has achieved a milestone by closing above the 153 level for the first time since 1990, signaling a significant shift in currency dynamics as the Asian market opens.
The currency markets experienced a continuation of the trends observed during Wednesday’s trading session, with the US dollar index exhibiting marginal gains initially before ultimately settling flat to form a doji pattern. Among the major FX pairs, AUD/USD, NZD/USD, and GBP/USD saw modest increases, while overall market volatility remained subdued despite key events such as the ECB meeting, US PPI data release, and speeches by several Fed members.
Federal Reserve officials have signaled a reluctance to rush into interest rate cuts, with Williams emphasizing that there is “no clear need to adjust monetary policy in the near term,” and Collins suggesting that it “may take more time than previously thought” to gain confidence in lower inflation levels. Despite the release of higher-than-expected PPI figures, which stood at 2.4% year-on-year (compared to the expected 2.3%), markets appeared unfazed, particularly as core PPI remained flat at 0.2% month-on-month, and PPI softened to 2.1% year-on-year and 0.2% month-on-month.
Meanwhile, the European Central Bank (ECB) hinted at the possibility of a rate cut in June, despite pushback from the Federal Reserve regarding a similar move. ECB President Lagarde stated that it “would be appropriate” to ease in June if a fresh assessment of data provided confidence to do so.
EUR/USD experienced initial downward pressure, briefly breaching the December low to test the February low before rebounding just above the original breakout level. Although the prevailing bias suggests a potential rise in the US dollar towards the 106 level and a decline in EUR/USD below the February low, the immediate outlook points to a period of consolidation or retracement. In equity markets, DAX futures failed to garner support or stage a rebound, instead declining towards the highlighted support zone around 1800, which is expected to offer significant near-term support.
Amidst these developments, gold reached a fresh record high, while US yields saw marginal decreases at the short end, with yields for the 5-year and longer tenures rising by 1-4 basis points.
