Forex Today: US Dollar loses bullish momentum ahead of key data releases

Here is what you need to know on Thursday, February 15:

The US Dollar (USD) failed to build on Tuesday gains and the USD Index (DXY) closed in negative territory on Wednesday as the risk mood improved in the American session. Eurostat will release Trade Balance data for December in the European session. Later in the day, January Retail Sales and Industrial Production data will be featured in the US economic docket, alongside the weekly Initial Jobless Claims. 

Wall Street's main indexes registered gains on Wednesday following Tuesday's sharp decline that was triggered by the hot US inflation numbers. Additionally, the benchmark 10-year US Treasury bond yield retreated from the multi-week high it set at 4.3% and lost more than 1% on the day. Early Thursday, US stock index futures trade modestly higher and the 10-year US yield continues to edge lower toward 4.2%, making it difficult for the USD to gather strength.

The UK's Office for National Statistics reported on Thursday that the Gross Domestic Product (GDP) contracted at an annual rate of 0.2% in the fourth quarter. This reading followed the 0.3% expansion recorded in the previous quarter and came in weaker than the market expectation for a 0.1% growth. Other data from the UK showed that the Manufacturing Production and Industrial Production increased by 0.8% and 0.6%, respectively, on a monthly basis in December. GBP/USD came under modest bearish pressure following the mixed data and was last seen trading at around 1.2550.

After closing in negative territory for two consecutive days, EUR/USD staged a correction and registered small gains on Wednesday. Early Thursday, the pair fluctuates in a narrow channel below 1.0750. During the European trading hours, European Central Bank President Christine Lagarde will testify before the Committee on Economic and Monetary Affairs of the European Parliament.

During the Asian trading hours, the Australian Bureau of Statistics announced that the Unemployment Rate rose to 4.1% in January from 3.9%. Employment Change was +0.5K in that period, compared to the market expectation for an increase of 30K. AUD/USD showed no immediate reaction to these figures and was last seen moving sideways slightly below 0.6500.

USD/JPY posted small losses on Wednesday and continued to push lower toward 150.00 in the Asian session on Thursday. The data from Japan showed that the GDP contracted by 0.1% on a quarterly basis in Q4.

After breaking below $2,000 on Tuesday, Gold struggled to stage a rebound but retreating US yields helped the precious metal find a foothold on Wednesday. Early Thursday, XAU/USD stays in a consolidation phase slightly above $1,990.