Forex Today: Central bank heavyweights take center stage in Sintra

Eren Sengezer FXStreet

Here is what you need to know on Wednesday, June 28:

Federal Reserve (Fed) Chairman Jerome Powell, European Central Bank (ECB) President Christine Lagarde, Bank of England (BoE) Governor Andrew Bailey and Bank of Japan (BoJ) Kazuo Ueda will be speaking at a panel at the ECB Forum on Central Banking in Sintra on Wednesday. The US economic docket will feature Goods Trade Balance for May and the Fed will release the Bank Stress Test results later in the day.

After the data from the US showed that New Home Sales rose at an impressive pace in May and the CB Consumer Confidence Index improved noticeably in June, the US Dollar (USD) managed to stay resilient against its rivals late Thursday. Nevertheless, the risk-positive market environment didn't allow the currency to gather bullish momentum. Early Wednesday, the US Dollar Index clings to small daily gains above 102.50 and US stock index futures trade modestly lower on the day.

During the Asian trading hours, the data from Australia showed that the Consumer Price Index (CPI) rose 5.6% on a yearly basis in May. This reading followed the 6.8% increase recorded in April and came in below the market expectation of 6.1%. Pressured by the soft inflation data, AUD/USD fell to its lowest level in three weeks, below 0.6650.

EUR/USD climbed toward 1.1000 and registered strong gains on Tuesday. Ahead of the ECB event, the pair stays in a consolidation channel at around 1.0950.

GBP/USD is having a difficult time holding its ground and trading below 1.2750 on Wednesday after having closed in positive territory on Tuesday.

USD/JPY rally continued and the pair reached a fresh multi-month high of 144.20 on Tuesday. "We are closely watching currency moves with a strong sense of urgency,” Japan's top currency diplomat Masato Kanda said on Wednesday. "We will respond appropriately if it becomes excessive." Following these comments, the pair holds steady at around 144.00.

USD/CAD gained traction and climbed above 1.3200 on Tuesday after Statistics Canada reported that the annual CPI declined to 3.4% in May from 4.4% in April. The pair continues to stretch higher early Wednesday and was last seen trading near 1.3230.

Gold failed to benefit from the broad US Dollar weakness on Tuesday as US Treasury bond yields staged a rebound. XAU/USD stays on the back foot and trades at its weakest level since early March near $1,910.

Bitcoin snapped a three-day losing streak on Tuesday but met resistance near $31,000. Early Wednesday, BTC/USD corrects lower and trades below $30,500. Ethereum continues to fluctuate in a narrow channel below $1,900 for the sixth straight day on Wednesday.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD onsolidates around mid-1.1800s as traders keenly await FOMC Minutes

The EUR/USD pair struggles to capitalize on the previous day's goodish rebound from the 1.1800 neighborhood, or a one-and-a-half-week low, and consolidates in a narrow band during the Asian session on Wednesday. Spot prices currently trade just below mid-1.1800s, nearly unchanged for the day.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.