What to keep in mind on Wednesday, May 22:
Financial markets did not advance on Tuesday, with major pairs remaining at familiar levels and within tight ranges. The US dollar saw a modest rally in a risk-off environment, and Asian and European indices closed in the red. Wall Street, however, managed to post modest gains ahead of the release of after-hours earnings reports.
The EUR/USD remained around 1.0850, unaffected by minor European macroeconomic numbers that were generally encouraging.
GBP/USD remained stuck around the 1.2700 area, although the United Kingdom (UK) will release the Consumer Price Index (CPI) and other inflation-related figures on Wednesday, which could bring the pair back to life.
The Canadian dollar fell sharply and the USD/CAD pair stood at 1.3674, after the Canadian inflation figures were released. The Consumer Price Index (CPI) fell to 2.7% annually in April from 2.9% in March, while the Bank of Canada's core Consumer Price Index rose 1.6% annually, below growth of 2%. recorded in March.
The AUD/USD pair held around 0.6660 despite Australian consumer confidence in May's Westpac improving to -0.3% from -2.4% in April. Separately, the Reserve Bank of Australia (RBA) published the minutes of its May policy meeting, which maintained the overall hawkish stance adopted at the previous meeting.
The Fed Board released its Economic Wellbeing of American Households in 2023 report, which examines the financial circumstances of American adults and their families. The document showed that, overall, “financial well-being remained virtually unchanged from 2022, as rising prices remained a challenge for most households and workers continued to benefit from a strong labor market.” This news is quite discouraging, even more so after inflation picked up in the first quarter of the year, further diluting the chances of multiple rate cuts during the rest of the year.
US Dollar Prices This Week
The following table shows the percentage change of the United States Dollar (USD) against the main currencies quoted this week. The US Dollar was the strongest currency against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.12% | -0.11% | 0.34% | 0.27% | 0.40% | 0.62% | 0.18% | |
| EUR | -0.12% | -0.26% | 0.25% | 0.15% | 0.31% | 0.51% | 0.07% | |
| GBP | 0.11% | 0.26% | 0.40% | 0.42% | 0.57% | 0.76% | 0.33% | |
| JPY | -0.34% | -0.25% | -0.40% | -0.09% | 0.07% | 0.32% | -0.14% | |
| CAD | -0.27% | -0.15% | -0.42% | 0.09% | 0.09% | 0.35% | -0.08% | |
| AUD | -0.40% | -0.31% | -0.57% | -0.07% | -0.09% | 0.18% | -0.24% | |
| NZD | -0.62% | -0.51% | -0.76% | -0.32% | -0.35% | -0.18% | -0.43% | |
| CHF | -0.18% | -0.07% | -0.33% | 0.14% | 0.08% | 0.24% | 0.43% |
The heat map shows the percentage changes of the major currencies against each other. The base currency is chosen in the left column, while the quote currency is chosen in the top row. For example, if you choose the US Dollar in the left column and scroll down the horizontal line to the Japanese Yen, the percentage change that appears in the box will represent USD (base)/JPY (quote).
Looking ahead, the Reserve Bank of New Zealand will announce its monetary policy decision early on Wednesday and could introduce some noise into commodity currencies.
Additionally, the US Federal Open Market Committee (FOMC) will publish the minutes of its latest meeting on Wednesday. Markets are waiting for the timing of the shift in monetary policy to be clarified, something policymakers have so far refused to do.
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.
