Forex Today: Dollar Struggles to Gain Traction Amid Mixed Markets, Focus on US Data

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This is what you need to know to trade today Tuesday June 28:

The dollar index consolidates the previous day’s rebound around 104.00 at the start of the European session this Tuesday, while Asian stock markets struggle to gain traction amid a market sentiment mixed. US index futures also reflect the same cautious trait, fluctuating between gains and losses for the time being. The idea that Expectations for aggressive Fed rate hike have cooled amid growing concern over a sharp economic slowdown, it remains in play. However, stronger-than-expected US durable goods and pending home sales data hinted at a healthy US economy, which could withstand large rate hikes by the Fed.

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Meanwhile, markets weighed China’s commitment to continue to support monetary policy, while Beijing and Shanghai reported no new covid cases after four months. The latest sell-off in tech stocks, led by negative news for Tencent Holdings, kept investors on their toes. Amid gloomy sentiment, safe-haven demand for US bonds is back, causing US Treasury yields to pull back. Benchmark 10-year yield down 0.50 % on the day, up 3.18%, after peaking at 3.22% on Monday.

Investors are also cautious as they await a series of speeches from ECB policy makers and US consumer confidence data. which will be published later on Tuesday. However, this week’s main event risk remains Wednesday’s policy panel between the Fed, BoE and ECB presidents at the annual ECB Forum in Sintra, Portugal.

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The pair EUR/USD is stuck in a tight range below 1.0600, unable to find any momentum after the latest news from Reuters, which cites that the ECB may unveil a new bond-buying plan to cap yields at its July policy meeting. ECB President Christine Lagarde will speak at the ECB Forum on Central Banking at 08:00 GMT.

The pair GBP/USD trades in a range 25 pips below 1.2300 as sterling traders remain cautious on Brexit risks. UK Foreign Secretary Liz Truss said on Monday that they do not rule out using article 16 later. Meanwhile, “as expected, the Northern Ireland Protocol Bill passed its first hurdle, with MPs voting 295 to 221 in favour, despite strong criticism from some Conservative MPs, including former Prime Minister Theresa May, who said that “the measure is illegal and unnecessaryThe Guardian reported.

The USD/JPY keeps its volatility intact within a defined range above 135.00, following the sentiment around yields and the dollar.

The Prayed recovers acceptably above $1,825, ahead of the expected G7 decision to ban Russian gold imports to tighten sanctions on Moscow.

The Bitcoin defends the $20,000 level. The ethereum up 0.50% on the day, battling $1,200.

Source: Fx Street

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