Forex Today: Dollar Rises Alongside Yields, Spotlight on EU Inflation Data

This is what you need to know to trade today tuesday may 31:

The dollar rallied against its rivals early on Tuesday, while US Treasury yields rose after the three-day weekend in the US. During the European session, Eurostat will publish the preliminary data of the Harmonized Index of Consumer Prices (HICP), the inflation indicator of the European Central Bank, corresponding to the month of May. Later in the day, the US economic docket will include the March House Price Index, Conference Board Consumer Confidence data and the Federal Reserve Bank of Dallas Texas Manufacturing Survey. Additionally, US President Joe Biden will meet with FOMC Chairman Jerome Powell to discuss the economy and inflation.

The yield on the 10-year US Treasury note, which lost 1.5% last week, has already risen more than 3% so far this week to 2.84%. The dollar index is up 0.3% to trade at 101.70 in European morning trading.

During the Asian session, data from China showed that business activity in the manufacturing and service sectors continued to contract in May. On a positive note, it is reported that the city of Shanghai is on track to fully resume normal life from June 1, as originally planned. However, the market sentiment remains cautious and S&P futures are trading virtually unchanged on the day.

Meanwhile, the European Union has agreed to ban 90% of Russian oil imports by the end of 2022. crude oil prices prices soared after this event and a barrel of West Texas Intermediate was trading at its highest level since early March at $119.20, up 1.8% on the day.

The EUR/USD reversed direction and pulled back below 1.0750 after hitting its strongest level since late April at 1.0788 on Monday. Euro zone IPCA inflation is expected to rise to 7.7% y/y in April. The basic IPCA is expected to remain unchanged at 3.5% in the same period.

The GBP/USD it closed the previous five days of trading in positive territory, but lost its traction. At press time, the pair was down 0.5% on the day, trading slightly below 1.2600. The Bank of England will publish the change in consumer credit for April throughout the day.

The pair USD/CAD fell sharply as rising crude prices helped the commodity-sensitive Canadian dollar gain strength on Monday. The pair is struggling to gain traction and is trading at fresh multi-week lows below 1.2700.

The Prayed It is still moving sideways in a relatively tight channel around $1,850 early on Tuesday. Rising US Treasury yields make it difficult for XAU/USD to build on last week’s gains.

The USD/JPY recovered to 128.00 supported by rising US bond yields. Data from Japan earlier in the day showed the Consumer Confidence Index improved to 34.1 in May from 33, but this result had little to no impact on the pair’s action.

The Bitcoin it broke out of its trading channel of two weeks ago and climbed above $31,000 before entering a consolidation phase. The ethereum gained more than 10% on Monday but lost its upside momentum near $2,000.

Source: Fx Street

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