Here is what you need to know on Tuesday, June 7:
With the benchmark 10-year US Treasury bond yield rising above 3% on Monday, the greenback gathered strength against its rivals at the start of the week. The US Dollar Index extended its rebound early Tuesday and climbed to its highest level in two weeks. Sentix Investor Confidence report from the euro area will be looked upon for fresh impetus during the first half of the day. Later in the session, April Goods Trade Balance and Consumer Credit Change data will be featured in the US economic docket.
US stock index futures are down between 0.5% and 0.8% in the early European session, pointing to a risk-averse market atmosphere.
During the Asian trading hours on Tuesday, the Reserve Bank of Australia (RBA) announced that it hiked its policy rate by 50 basis points to 0.85% following its policy meeting. Commenting on the policy decision, RBA Governor Phillip Lowe noted that inflation in Australia has increased significantly. "The board expects to take further steps in the process of normalising monetary conditions in Australia over the months ahead," Lowe added.
Although AUD/USD spiked to a daily high of 0.7243 with the initial reaction to the RBA's bigger-than-expected rate increase, it erased a large portion of its daily gains and returned to the 0.7200 area in the European morning.
GBP/USD managed to close in positive territory on Monday but came under renewed bearish pressure on Tuesday. The pair was last seen trading at its lowest level since May 19 below 1.2500. British Prime Minister Boris Johnson has survived the no-confidence vote on Monday but 148 MPs voted against him.
EUR/USD fluctuates in a narrow band below 1.0700 on Tuesday after having posted small losses on Monday. The data published by Germany's Destatis revealed that Factory Orders contracted by 2.7% on a monthly basis in April, missing the market expectation for an increase of 0.5% by a wide margin.
Pressured by rising US Treasury bond yields, gold edged lower at the start of the week and closed below $1,840. XAU/USD stages a modest rebound on Tuesday but continues to trade below $1,850.
Bank of Japan Governor Haruhiko Kuroda reiterated earlier in the day that a weak Japanese yen would be beneficial for the economy if fluctuations in exchange rates were not too sharp. USD/JPY extended its rally and reached its highest level in more than 20 years above 132.70.
Following Monday's recovery, Bitcoin turned south on Tuesday and was last seen losing nearly 6% on the day at $29,500. Ethereum lost its momentum before testing $2,000 and fell below $1,800 early Tuesday.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.