What you need to know on Wednesday, May 5:
The US dollar was the outright winner on Tuesday, advancing against most of its main rivals. The dollar was boosted by local data suggesting continued economic improvement, but also by comments from US Treasury Secretary Janet Yellen, who said that “interest rates will have to go up a bit to make sure our economy does not overheat. ” Yellen will be participating in another event early in the next Asian session, and her words may spur additional dollar earnings. EUR / USD ended the day just above the 1.2000 level.
Brexit is back in the spotlight. The pound remained subdued and closed the day below 1.3900 against the dollar. The French government rejected the latest British regulation for fishing in its waters near the Channel Islands. French fishermen have complained that they are being prevented from operating in British waters due to difficulties obtaining licenses, a Brexit-related issue that has intensified in recent weeks.
Commodity-linked currencies eased against the dollar, although the Canadian dollar’s decline was limited as oil prices soared. The WTI closed at $ 65.70 a barrel, supported by the resurgence in demand. Gold, on the other hand, flirted with $ 1,800 before falling sharply and ended the day at $ 1,778.90 a troy ounce.
European and US indices mostly closed in the red after a strong start to the day. Yellen’s comments were heavy. Yields on US Treasuries fell, with the 10-year yield trading at 1.59%