What you should keep in mind on Wednesday 22 June:
US Federal Reserve ChiFE Jerome Powell will testify before Congress. His pre-prepared remarks will be made before the programme. Market players will look for signs of quantitative strength in future. Additionally, the UK will post updates on inflation figures.
The US dollar on Tuesday edged lower against most major rivals amid a better mood in the market. However, the USD/JPY pair reached a new multi-year high of 136.61 while holding close at the end of the US session. The collapse of the yen is mostly due to the Bank of Japan’s stubborn commitment to its ultra-lax monetary policy.
Global indices rise, Wall Street posted substantial gains and limited demand for the security. US government bond yields rose, but not enough to revive inflation concerns.
During this, Central bankers keep hinting at aggressive measures, Bank of England chief economist Huw Pill said they would certainly be ready to act if they saw evidence of continued price pressure. Reserve Bank of Australia Governor Philip Lowe opened the door for a 50 bps rate hike in July. Finally, European Central Bank Governing Council member Oli Rehn said it was very likely that the September rate hike would be 25 bps larger than the planned one for July.
The EUR/USD pair trades around 1.0530, changes slightly on a daily basis. GBP/USD registered a slight uptrend and is now trading near 1.2280. The improved tone of equities helped the commodity-linked currencies move further against its US rival. AUD/USD is up to 0.6970, while USD/CAD trades in the 1.2910 price zone.
Gold is battling a pressure of $1,830. Crude oil prices saw little change on Tuesday, with WTI now trading at around $109.50 a barrel.
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