The EUR/USD pair is demonstrating a non-directional performance above the round-level support of 1.0900 in the Asian session. The major currency pair is following the footprints of the sideways US Dollar Index (DXY), which is expected to provide action after Federal Reserve (Fed) chair Jerome Powell’s testimony.
GBP/USD is losing the upside traction, holding steady above 1.2750 ahead of the high-impact UK CPI inflation data. The annual UK CPI is seen rising 8.4% in May, against an 8.7% increase reported in April while the Core CPI is likely to rise 6.8%, at the same pace seen in April.
The US Dollar index moved up on Tuesday and sank the Yen as investors weighed the US interest rate outlook ahead of Federal Reserve Chair Jerome Powell’s congressional testimony. US Treasury yields also eased but USD/JPY fell to 141.21 from a high of 142.25 nonetheless.
AUD/USD stays mildly bid around 0.6790 as it prints the first daily gains in four while bouncing off the one-week low marked the previous day. That said, the Aussie pair’s recovery during early Wednesday’s Asian session could be linked to the market’s preparations for this week’s key event, namely the bi-annual testimony of Fed Chair Jerome Powell.
The NZD/USD pair struggles to capitalize on the overnight bounce from the 0.6135-0.6130 area or a one-week low and oscillates in a narrow band through the Asian session on Wednesday. The announcement by the People’s Bank of China (PBoC) to cut rates and a strong USD are the main reasons why the Kiwi weakened.
USD/CAD prints the first daily loss in three around 1.3210 as it braces for the top-tier Canada and the US catalysts ahead of Wednesday’s European session. In doing so, the Loonie pair justifies the recently firmer price of WTI crude oil, Canada’s key export item, as well as the inactive US Dollar Index (DXY).
USD/CHF prints mild gains around 0.8990 as it remains firmer for the fourth consecutive day heading into Wednesday’s European session. In doing so, the Swiss Franc (CHF) pair seesaws inside an upward-sloping trend channel stretched from the last Friday.
Oil prices rose slightly on Wednesday after two straight sessions in red, taking some support from strong U.S. economic data and hopes of improving demand in Asia, although caution still persisted ahead of more cues on U.S. monetary policy.
Gold price struggles to gain any meaningful traction and oscillates in a range on Wednesday. The hawkish outlook by major central banks acts as a headwind for the non-yielding XAU/USD. Economic woes help limit the downside ahead of Fed Chair Powell’s congressional testimony.
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