The dollar index (DXY00) on Friday fell by -0.02%.  The dollar Friday gave up an early advance and posted modest losses.  Strength in the euro and yen Friday sparked long liquidation in the dollar.  The dollar Friday initially moved higher after bond yields rose on the news that the Apr S&P U.S. manufacturing PMI unexpectedly expanded by the most in 6 months. 

The U.S. Apr S&P manufacturing PMI unexpectedly rose +1.2 to 50.4, stronger than expectations of a decline to 49.0 and its strongest pace of expansion in 6 months.

EUR/USD (^EURUSD) on Friday rose by +0.07%.  The euro Friday recovered overnight losses and moved slightly higher on hawkish comments from ECB Vice President Guindos and ECB Governing Council member Makhlouf.  EUR/US Friday initially moved lower after the Apr S&P Eurozone manufacturing PMI unexpectedly contracted by the most in nearly three years.

Hawkish ECB comments Friday were bullish for EUR/USD. ECB Vice President Guindos said, "Core inflation remains very sticky" and may be more persistent than markets had anticipated.  Also, ECB Governing Council member Makhlouf said it is too early for the ECB to plan a pause in tightening, and interest rates need to continue at "restrictive levels."

The Apr S&P Eurozone manufacturing PMI unexpectedly fell -1.8 to 45.5, weaker than expectations of an increase to 48.0 and the weakest report in nearly three years.  However, the Apr S&P Eurozone composite PMI rose +0.7 to an 11-month high of 54.4, stronger than expectations of no change at 53.7.

USD/JPY (^USDJPY) on Friday fell by -0.04%.  The yen Friday posted modest gains on signs of strength in Japan’s economy.  Friday’s news showed that Japan’s Mar national CPI ex-food and energy rose more than expected and by the most in 41 years, and a gauge of Japan’s manufacturing activity rose to a 6-month high.  However, gains in the yen were limited Friday from higher T-note yields.

The Japan Apr Jibun Bank manufacturing PMI rose +0.3 to a 6-month high of 49.5.

The Japan Mar national CPI ex-food and energy rose +3.8% y/y, stronger than expectations of +3.6% y/y and the largest increase in 41 years.

June gold (GCM3) on Friday closed down -28.60 (-1.42%), and May silver (SIK23) closed down -0.315 (-1.24%).  Precious metals on Friday posted moderate losses.  Higher global bond yields on Friday undercut precious metals.  Also, hawkish comments today from ECB Governing Council member Makhlouf weighed on metals when he said it's too early for the ECB to plan a pause in tightening.  Silver prices were also under pressure on negative carryover from a slump in iron ore prices today to a 4-month low and a drop in copper prices to a 1-week low.

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