Pound Sterling (GBP) is a relative outperformer as we head into Wednesday’s NA session, up nearly 0.3% vs. the US Dollar (USD) with a notable pop in response to the stronger than expected CPI release for the month of May.
European Central Bank (ECB) Governing Council member Mario Centeno said on Wednesday that he is very worried about the European economy's growth prospects and argued that inflation will not be at 2% without growth.
The Canadian Dollar (CAD) is little changed on the session after reversing losses through the upper 1.36s in thin trade just ahead of the Asian open earlier, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
British Pound’s recovery attempts from Tuesday’s lows near 1.3400 have stalled about 50 pips higher on Wednesday’s European session. Investors are wary of placing US Dollar's directional bets ahead of the ªFederal Reserve’s monetary policy decision.
At least as far as the key interest rate is concerned, today's FOMC meeting is unlikely to be particularly exciting, as it is widely expected that the Fed will leave the interest rate corridor unchanged at 4.25-4.50%.
Markets expect the Fed to keep rates on hold today. Recent data has surprised in a dovish direction, but projections and the dot plot will shift more hawkish.
Iron ore prices sank below $93/t as demand continues to slow down in China. Demand from China is likely to remain weak amid the continued slowdown in China’s property market.
Inflation in the United Kingdom was higher than expected in April. One reason for this was the sharp increase in travel prices, which pushed up both the core and headline rate, Commerzbank's FX analyst Michael Pfister notes.
Federal Reserve Chairman Jerome Powell explained the decision to leave the policy rate unchanged at the 4.25%–4.50% range following the June meeting and responded to questions during the post-meeting press conference.
Swiss National Bank's Monetary Policy Committee (MPC) meeting takes place tomorrow. Markets have fully priced in a 25bp cut to bring the policy rate down to zero. Pair was last at 0.8178 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Tensions in the Middle East continued to disrupt energy logistics as Qatar instructed LNG vessels to delay entering the Strait of Hormuz, ING's commodity experts Ewa Manthey and Warren Patterson note.
US Dollar (USD) rebounded as markets grapple a challenging environment of higher oil prices and falling equities amid ongoing geopolitical uncertainties. DXY was last at 98.64, OCBC's FX analysts Frances Cheung and Christopher Wong note.
The oil market remains on edge with the conflict between Israel and Iran entering its sixth day, ING's commodity experts Ewa Manthey and Warren Patterson note.
The UK has just released CPI figures for May. While the headline reading slowed a tad less than expected to 3.4%, and core was in line with consensus at 3.5%, the closely-monitored services CPI came in a bit below expectations at 4.7% (expected 4.8%), ING's FX analyst Francesco Pesole notes.
NZD/USD is retracing its recent losses, trading around 0.6030 during the European hours on Wednesday. The technical analysis of the daily chart suggests the potential for weakening bullish bias, as the pair tests the lower boundary of the ascending channel pattern.
European Central Bank (ECB) executive board member Fabio Panetta said on Friday, “the ECB is not pre-committing to a defined course on monetary policy.”
AUD/JPY holds gains after registering nearly 0.50% losses in the previous session, trading around 94.20 during the European hours on Wednesday. However, the upside of the currency cross could be limited due to heightened safe-haven demand, driven by escalating Middle East tensions.
Oil price increases have a greater impact on the global economy than Oil price declines. The main impact is felt via an immediate rise in headline inflation. Transport shares, net fuel imports, public debt/GDP and trade integration are key factors to watch.
European Central Bank (ECB) Governing Council member Fabio Panetta said on Wednesday that the ECB will keep a flexible approach to monetary policy decisions amid heightened risks due to the Israel-Iran conflict.
The USD/CAD is trimming some gains on Wednesday, with investors reducing USD long positions ahead of the Federal Reserve’s monetary policy meeting, due later today.
There's strong consensus that the Fed will keep rates steady and reaffirm a wait-and-see stance as they gather more information on the impact of government policies and economic developments
The GBP/JPY cross trades in negative territory near 195.05 during the early European trading hours on Wednesday. The cautious mood in the market provides some support to the Japanese Yen (JPY), a safe-haven currency.
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