US Dollar in focus ahead of PCE data

European Markets

The British pound saw modest strength after UK consumer activity surged far beyond projections.

February’s retail sales grew by 1% on the month—defying expectations of a contraction—and came in at 2.2% annually, far outpacing the modest 0.6% forecast.

GDP figures showed stable growth, with year-on-year expansion at 1.5%, slightly above expectations. The quarterly pace remained unchanged at 0.1%. The UK’s current account deficit narrowed slightly more than expected, posting a -£21.0B figure.

GBP/USD found support on the data, firming through the European morning.

US Market

All eyes shift to the US this afternoon, with the Federal Reserve's preferred inflation gauge—the Core PCE Price Index—set for release. The reading could set the tone for upcoming rate path expectations.

Meanwhile, the University of Michigan will publish its final March consumer sentiment and inflation expectations later in the session. The greenback is holding steady ahead of the prints, though the dollar-yen pair softened slightly amid stronger inflation data from Japan’s capital.

Currencies

The yen recovered ground, with USD/JPY dropping after Tokyo's March inflation rose faster than expected. The capital’s consumer price index came in at 2.4% versus the 2.2% forecast, reinforcing expectations that Japan’s central bank may continue tightening after its historic rate shift.

The euro edged lower to around 1.0780, surrendering part of Thursday’s modest rebound which had ended a six-session losing streak. Despite improved risk sentiment, the pair remains range-bound with traders awaiting clearer US inflation signals before making directional bets.

Commodities

Gold extended its powerful rally and reached uncharted territory above $3,085 per ounce. The yellow metal continues to benefit from lingering geopolitical risks, US policy uncertainty, and a weakening macro backdrop, driving safe haven flows into the

WTI crude oil saw a slight uptick to hover near $69.70 during the early Asian hours. Traders remain alert to potential supply-side tensions after former US President Donald Trump floated the idea of imposing tariffs on those importing Venezuelan oil. Adding to the bullish tone, US crude inventories declined by over 3.3 million barrels last week, as reported by the EIA.