This is what you need to know to trade today Wednesday May 25:
Pressured by falling US Treasury yields, the greenback continued to weaken against its rivals on Tuesday. However, the market’s risk-averse environment helped the dollar index limit its losses. Early on Wednesday, the dollar is holding firm against its main rivals, pending April US Durable Goods Orders data. Later, the FOMC will publish the minutes of its May monetary policy meeting. The European Central Bank (ECB) will also publish the EU financial stability report.
Preview of the FOMC minutes for May: Will the Fed have to sell MBS?
the escalation of geopolitical tensions between China and the United States drives investors away from risk-sensitive assets. Chinese state media said on Wednesday that they recently held a military exercise around Taiwan as a serious warning to US-Taiwan interactions. Meanwhile, Bloomberg reported on Wednesday that the port city of Tianjin, located near Beijing, closed a downtown district amid a spike in the number of confirmed coronavirus infections.
The US stock index futures They are trading flat in the early stages of the European session and the 10-year US Treasury bond yield remains unchanged on the day, around 2.75%.
During the Asian day, the Reserve Bank of New Zealand (RBNZ) raised its interest rate by 50 basis points to 2%, as expected. Commenting on the outlook for monetary policy, RBNZ Governor Adrian Orr said he was confident households could withstand higher rates, adding that it may be necessary to raise the policy rate above the neutral rate, which is estimated around 2%-3%. The NZD/USD gained traction on the aggressive tone of the RBNZ and rose above 0.6500 for the first time in three weeks.
The EUR/USD hit a new monthly high of 1.0750 on Tuesday, after ECB President Christine Lagarde said interest rates could move into positive territory late in the third quarter. The pair remains lower early on Wednesday and trades below 1.0700. Lagarde will deliver a speech today at the World Economic Forum.
The GBP/USD snapped a three-day winning streak on Tuesday. Disappointing UK PMI data reignited fears of a recession in the country and hampered demand for the British pound. The pair remains relatively calm near 1.2550 in the European morning.
The Prayed took advantage of falling US bond yields and posted daily gains for the fifth day in a row before entering a consolidation phase near $1,860.
The Bitcoin It continues to move up and down in a horizontal channel near $30,000. The ethereum struggles to find direction and extends its sideways move slightly below $2,000.
Source: Fx Street
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