This is what you need to know to trade today Tuesday June 7:
With the benchmark 10-year US Treasury yield topping 3% on Monday, the dollar has gained strength against its rivals at the beginning of the week. The US dollar index extended its rebound early on Tuesday and rose to its highest level in two weeks. The Sentix investor confidence report of the euro zone could generate a new impulse during the first half of the day. Later in the session, April goods trade balance data and the change in consumer credit will appear on the US economic calendar.
The futures of US stock indices down between 0.5% and 0.8% in the first hours of the European session, which points to a risk-averse environment in the market.
During the Asian session on Tuesday, The Reserve Bank of Australia (RBA) announced that it was raising its interest rate by 50 basis points, up to 0.85%, after its monetary policy meeting. Commenting on the policy decision, RBA Governor Phillip Lowe noted that inflation in Australia has risen sharply. “The board expects to take further steps in the process of normalizing monetary conditions in Australia in the coming months.Lowe added.
Although the AUD/USD reached a daily high of 0.7243 as an initial reaction to the higher than expected RBA rate hike, the pair erased much of its daily gains and returned to the 0.7200 area in European morning.
The GBP/USD managed to close in positive territory on Monday, but was again under bearish pressure on Tuesday. The pair has fallen to its lowest level since May 19, below 1.2500. British Prime Minister, Boris Johnson, has survived the motion of censure on Monday, but 148 deputies voted against him.
The EUR/USD it is trading in a tight range below 1.0700 on Tuesday, after posting small losses on Monday. Data published by the German agency Destatis revealed that factory orders contracted 2.7% month over month in Aprilwidely missing market expectations for a 0.5% rise.
Pressured by rising US Treasury yields, gold dipped at the start of the week, closing below $1,840 on Monday. The XAU/USD staged a modest rebound on Tuesday, but is still trading below $1,850.
The Governor of the Bank of Japan, Haruhiko Kuroda, reiterated earlier in the day that weakness in the Japanese yen would be beneficial to the economy if exchange rate fluctuations were not too sharp. The USD/JPY extended its rally and reached its highest level in more than 20 years above 132.70.
After Monday’s recovery, the Bitcoin drifted lower on Tuesday and is now down nearly 6% on the day at $29,500. The ethereum it lost its momentum before testing $2,000 and dipped below $1,800 early on Tuesday.
Source: Fx Street
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