This is what you need to know to trade today Wednesday May 11:
The observed positive change in risk sentiment in the middle of the week makes it difficult for the dollar to continue to outperform its rivals. As investors await data from the US CPI consumer price index, expected to decline to 8.1% y/y in April from 8.5% in March, the US dollar index DXY remains relatively calm below 104.00. Market participants will also continue to pay attention to comments from central bankers, including European Central Bank President Christine Lagarde, throughout the day.
See: US CPI Preview: Strong Core Inflation Will Drive Dollar to New Highs, and Two Other Scenarios
On Tuesday, US President Joe Biden said that the Federal Reserve is focused on taming inflation and added that his administration was considering scrapping Trump-era tariffs to Chinese imports to lower prices. “No decision has been made on this,” Biden further noted. The Shanghai Composite Index rose more than 1% on the day after this headline. The S&P 500 index closed higher on Tuesday, but the Dow Jones Industrial Average and Nasdaq Composite indices posted losses. Early on Wednesday, US stock index futures post modest gains. Data from China showed that the annual CPI jumped to 2.1% in April, against the market expectation of 1.8%.
Verr: US CPI Preview for April: Has Inflation Peaked?
Meanwhile, the yield on the 10-year US Treasury bond fell for the second day in a row on Tuesday and is still dipping below 3% as of early Wednesday. Cleveland Fed President Loretta Mester said Tuesday that the Fed will have to see what else is needed after raising the official interest rate by 50 basis points in June and July.
The EUR/USD it continues to move sideways in its tight weekly range above 1.0500 early on Wednesday. The member of the Governing Council of the European Central Bank (ECB), Francois Villeroy de Galhau, declared on Wednesday to France Inter radio that the illusion of unlimited debt and no costs was very attractive, but also very dangerous.
The GBP/USD closed flat above 1.2300 on Tuesday and posted small gains around 1.2350 at the start of today’s European session. In a recently published report, the UK’s National Institute for Economic and Social Research (NIESR) stated that the Bank of England needs to raise the official interest rate to 2.5% next year in order to fight inflation.
The gold fell to its lowest level in nearly three months, at $1,832, as of early Wednesday. Despite falling US Treasury yields, the yellow metal is still struggling to find demand. XAU/USD is trading slightly higher on the day, around $1,845 in European morning.
The USD/JPY remains directionless above 130,000 for the fourth day in a row. Japan’s Chief Cabinet Secretary, Hirokazu Matsuno, said earlier in the day that the government must respect the jurisdiction of the Bank of Japan (BoJ) in setting monetary policy.
After Monday’s sharp drop, the Bitcoin rallied modestly on Tuesday but failed to gain any upside momentum. At time of writing, BTC/USD is down more than 1% on the day, sitting at $30,600. The ethereum it rose more than 5% on Tuesday, but reversed its move early on Wednesday. ETH/USD is now down 1.3% at $2,300.
Source: Fx Street
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