This is what you need to know to trade today Wednesday April 6:
Buoyed by aggressive comments from the Fed and upbeat data releases, the US dollar index DXY has advanced to its highest level in almost two years first thing on Wednesday. The FOMC will release the minutes of its March monetary policy meeting later in the day. Investors will closely follow the news surrounding the war between Russia and Ukraine and the speeches of the officials of the European Central Bank (ECB).
The president of the European Commission, Ursula von der Leyen, announced on Tuesday that the European Union will impose a ban on Russian coal imports, worth approximately 4,000 million euros a year. The EU will also block all transitions with four big Russian banks. Later in the day, the United States is expected to unveil a new sanctions package, which will reportedly include a ban on all new investment in Russia.
Fed Vice Chair Lael Brainard said on Tuesday that the Fed was willing to take “stronger action” if inflation and inflation expectations called for it. Brainard further noted that they will move monetary policy to a more neutral stance later this year through a combination of balance sheet reduction and rate hikes.
Data from the United States showed that economic activity in the services sector continued to expand at an impressive rate in March.
Meanwhile, the Caixin services PMI in China plummeted to 42 points in March from 50.2 seen in February, coming in below the market expectation of 53 points by a wide margin. China will keep Shanghai city under full lockdown until the results of the next round of mass testing, which is scheduled to begin on April 6, are in.
The EUR/USD it has fallen below 1.0900 and touched its lowest level in more than a month. Investors are increasingly concerned about a downturn in the eurozone economy amid a protracted conflict between Russia and Ukraine.
The GBP/USD rose above 1.3150 on Tuesday but made a sharp U-turn in the second half of the day following renewed dollar strength. At time of writing, the pair is posting small daily losses slightly above 1.3050.
Pressured by rising US Treasury yields, the gold closed in negative territory on Tuesday. Early Wednesday, XAU/USD is trading in a relatively tight range near $1,920.
The USD/JPY gained almost 100 pips on Tuesday and has extended the rally towards 124.00 earlier Wednesday. The benchmark 10-year US Treasury bond yield rose 2% to 2.6% at the start of the European session.
The AUD/USD advanced to its highest level since June 2021 following the aggressive tilt seen in forward guidance from the Reserve Bank of Australia. However, the pair gave back most of its gains and entered a consolidation phase below 0.7600.
The Bitcoin lost more than 2% on Tuesday and fell to $44,000 early Wednesday before rebounding. At time of writing, BTC/USD is trading little changed on the day at $45,400. The ethereum it has fallen almost 5% from the three-month high it set at $3,580 earlier in the week and is trading below $3,400.
Source: Fx Street
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