The dollar slipped on Thursday as a raft of disappointing second-tier U.S. data dragged Treasury yields lower and spurred betting on Fed rate cuts after a final 25bp hike in May following a recent pause.

The data -- jobless claims, Philly Fed, existing homes and the Conference Board's Leading Economic Index -- enhanced global market awareness that the ongoing battle against inflation will come at a cost to growth and demand for a variety assets.

EUR/USD recovered from its pre-U.S.
data release lows of 1.09335 on EBS, yielding little change on the day in response to a 3bp rise in 2-year bund-Treasury yield spreads.

The ECB is expected to hike rates roughly three times as much as the Fed between now and year-end and hold hikes longer, but Fed rates are priced to remain well above the ECB's into next year.

After a slide back toward Wednesday's 133.96 lows in response to tumbling Treasury-JGB yields spreads due to the mostly weaker-than-forecast U.S. data, USD/JPY managed to recover to just a 0.3% loss.

Unlike slipping bunds and gilts yields Thursday, JGB yields were steady heading into Friday's Japanese CPI report and ahead of the April 28 BoJ meeting.
That steadiness allowed the yen to also advance against the euro and sterling.

With Japanese CPI ex all food and energy at 2.1% in Feb and the outlook for global growth skewed to the downside, the BoJ will leave policy as is next week.
Another tweak to its yield curve control is possible if this year's relatively robust wage settlements prove more widespread and enduring, but only if the global outlook doesn't darken before then.

Sterling also recovered from Thursday's lows ahead of the U.S. claims and Philly Fed misses, but was finishing down 0.09%.
Prices continue to find support by the rising 21-day moving average.

Friday features April S&P Global PMIs.
Retreating oil prices will also be in focus as a global recession risk gauge.

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