The key event of the Asian session will be the Reserve Bank of New Zealand meeting. In addition, in New Zealand retail sales data will be published. Later in Europe, attention will turn to UK inflation data. During the American session, the Federal Reserve will publish the FOMC minutes.
Here’s what you need to know on Wednesday, May 24:
He American dollar strengthened on Tuesday amid risk aversion, while both the Nasdaq and SP500 saw falls of more than 1%. Although US yields fell, the Dollar Index (DXY) rallied, hitting two-month highs before retracing to 103.50.
The debt ceiling drama remains unresolved as negotiations continued on Tuesday following a “positive” meeting between President Biden and House Speaker McCarthy. In economic data, the US S&P Global PMI was mixed, while new home sales beat expectations. On Wednesday, the Federal Reserve (Fed) will publish the minutes of its last meeting.
The par EUR/USD it weakened and fell towards weekly lows, approaching 1.0750. The euro lost ground after data indicating a further contraction in the Eurozone manufacturing sector in May. The German IFO survey will be published on Wednesday.
He GBP/USD it fell on Tuesday, but closed far from lows. The pair bottomed at 1.2367, the lowest level in a month, and then bounced back above 1.2400. EUR/GBP fell to test April lows below 0.8680. On Wednesday, the UK will report inflation for April.
USD/JPY hit new six-month yearly highs near 139.00. It is currently hovering around 138.50/60 as the Japanese yen stabilizes amid declining Treasury yields.
The AUD/USD pair it posted its lowest daily close since late April, although it managed to hold above the key 0.6600 level. Deteriorating market sentiment weighed on the Australian dollar, which failed to take advantage of the rebound in commodity prices.
The NZD/USD pair suffered its worst day in a week, falling from 0.6300 to 0.6240. The Reserve Bank of New Zealand (RBNZ) will announce its decision on Wednesday. In addition, Retail Sales will be published.
TD Securities analysts wrote:
We expect the Bank to announce a 50 basis point hike this week and we have raised our estimate for the RBNZ terminal to 6% from 5.50%. Rising inflation due to fiscal stimulus and increased net migration raise the risk that inflation will not return to within the 1-3% band by the end of next year, as the RBNZ assumed in its MPS for February. The twin high deficits (the projected significant deterioration in implicit budget deficits in last week’s Budget and the record current account deficit) also warrant more aggressive action by the RBNZ.
The pair USD/CAD ended the session flat around 1.3500 after failing to hold stocks. The pair hit a one-week high at 1.3546 but then eased on better-performing loonie, buoyed by higher crude oil prices and higher-than-expected wholesale inflation data out of Canada.
Gold it ended slightly higher, trading above the $1,970 level, after rallying to $20 during the American session. Silver, for its part, fell again but ended up far from its daily minimum, around $23.40.
RBNZ Interest Rate Decision Preview: Kiwi set to fly on hawkish rate hike.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
