Forex Today: US Dollar loses recovery momentum, eyes on PMI surveys

Here is what you need to know on Thursday, May 23:

The US Dollar (USD) Index seems to have entered a consolidation phase early Thursday after climbing to a weekly high near 105.00 on Tuesday. S&P Global will release preliminary May Manufacturing and Services PMI reports for Germany, the Eurozone, the UK and the US later in the day. The US economic docket will also feature weekly Initial Jobless Claims and April New Home Sales data.

The negative shift seen in risk mood helped the USD stay resilient against its rivals in the American session on Wednesday. The minutes of the Federal Reserve's (Fed) April 30-May 1 policy meeting showed that policymakers still believed price pressures would ease, while seeing the need to maintain the restrictive policy at least until September. The benchmark 10-year US Treasury bond yield registered small gains on Wednesday and stabilized above 4.4% early Thursday. Meanwhile, US stock index futures trade in positive territory in the European morning, reflecting an improving risk sentiment.

The data from Australia showed early in the day that the Judo Bank Composite PMI declined to 52.6 in early May from 53 in April. AUD/USD showed no reaction to this report and was last seen trading modestly higher on the day above 0.6600.

Statistics New Zealand reported in the Asian session that Retail Sales grew by 0.5% on a quarterly basis in the first quarter. This reading followed the 1.6% contraction recorded in the previous quarter and came in better than the market expectation for a decline of 0.3%. NZD/USD edged higher after this report and was last seen rising more than 0.3% on the day near 0.6120.

Jibun Bank Manufacturing PMI in Japan improved to 50.5 in May from 49.6 and the Services PMI retreated to 53.6 from 54.3. After rising 0.4% on Wednesday, USD/JPY lost its bullish momentum and started to decline toward 156.50.

Following the choppy action seen earlier in the week, EUR/USD turned south and closed in negative territory on Wednesday. The pair, however, managed to stabilize above 1.0800.

GBP/USD lost its traction and erased a large portion of its daily gains after climbing to a new two-month high above 1.2750 early Wednesday, boosted by the stronger-than-forecast inflation data from the UK. The pair holds steady above 1.2700 in the European morning.

Gold came under heavy selling pressure after breaking below $2,400 and lost more than 1.5% on a daily basis on Wednesday. XAU/USD extends its slide early Thursday and was last seen trading below $2,370, losing over 0.5% on the day.