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Forex Today: Dollar clings to recovery gains as markets weigh Fed comments

Here's what you need to know to trade today Wednesday May 8:

He US dollar (USD) is holding firm against its rivals early on Wednesday, after posting marginal gains on Tuesday. In the United States, MBA mortgage applications and wholesale inventories for March will be published. In the meantime, market participants will continue to focus on comments from Federal Reserve (Fed) policymakers. Additionally, the US Treasury will hold a 10-year bond auction later in the American session.

Mixed action in major Wall Street indices and some hawkish comments from Minneapolis Federal Reserve President Neel Kashkari helped the dollar find demand in the second half of trading on Tuesday. After closing in positive territory, the Dollar Index continued to advance in the Asian session on Wednesday, now rising almost 0.2% on the day above 105.50. During the European morning, US stock index futures are trading slightly lower and the US 10-year Treasury bond yield is clinging to small gains, remaining below 4.5%.

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 Euro.

USD EUR GBP JPY CAD AUD NZD CHF
USD -0.20% -0.48% -1.43% -0.61% -0.49% -0.36% -0.47%
EUR 0.20% -0.19% -1.10% -0.35% -0.08% -0.08% -0.18%
GBP 0.48% 0.19% -0.95% -0.15% 0.10% 0.11% 0.03%
JPY 1.43% 1.10% 0.95% 0.81% 0.94% 1.09% 0.94%
CAD 0.61% 0.35% 0.15% -0.81% 0.00% 0.26% 0.20%
AUD 0.49% 0.08% -0.10% -0.94% -0.00% -0.01% -0.02%
NZD 0.36% 0.08% -0.11% -1.09% -0.26% 0.01% -0.06%
CHF 0.47% 0.18% -0.03% -0.94% -0.20% 0.02% 0.06%

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).

During the Asian session, the governor of the Bank of Japan, Kazuo Ueda, stated that monetary policy is oriented to the impact of inflation, rather than the exchange rate of the Japanese Yen: “The Bank of Japan may have to respond to through monetary policy if the impact of Yen movements affects the inflation trend,” Ueda added. After closing the first two days of the week in green, the USD/JPY continued to rise despite these comments and is trading above 155.00.

He EUR/USD closed in negative territory on Tuesday and snapped a four-day winning streak. The pair remains lower early on Wednesday and is trading below 1.0750.

He GBP/USD fell almost 0.5% on Tuesday and extended its decline below 1.2500 in mid-week. On Thursday, the Bank of England will announce its monetary policy decisions.

He Gold It failed to consolidate Monday's gains and closed below $2,320 on Tuesday. XAU/USD remains relatively calm early on Wednesday and remains near Tuesday's closing level.

He AUD/USD was under downward pressure on Tuesday as the Reserve Bank of Australia (RBA) struck a cautious tone regarding further tightening, after leaving monetary policy settings unchanged. The pair stretches lower on Wednesday, moving below 0.6600.

Source: Fx Street

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