The common currency remained under pressure due to the tense political situation in Italy. There were no macroeconomic releases in the EU that could affect the Euro, while the US only released the Richmond Fed Manufacturing Index for May, beating expectations. Today, multiple macroeconomic releases will be out for major economies, with EU and US Markit preliminary May PMI and FOMC Meeting’s Minutes to be the ones affecting the pair. The PMI indexes for the region are seen retreating and will likely add to the bearish tone of the EUR.
The GBP/USD continues drifting around the 1.3400 major level ahead of Wednesday’s London session. After several days of thin data, the GBP sees an active Wednesday, as the kingdom will release CPI, PPI, and Retail Price Index figures. The big figures for today will be the UK April inflation, as UK’s CPI expected at 2.2%, contracting from the previous reading of 2.3%.
Against the yen, the dollar fell 0.3 percent to 110.53 levels, pulling away from a four-month high of 111.40 yen set on Monday. The yen tends to rise in times of market turbulence since Japan is the world’s largest creditor nation and traders tend to assume Japanese investors would repatriate funds at times of crisis. Investors are now looking to the release on Wednesday of the Fed’s minutes from its most recent meeting, when it kept interest rates steady.
WTI oil holds in tight consolidation under new high at $72.76 (the highest since late Nov 2014) on Tuesday, as the bullish trend is maintained by strong global demand, new US sanctions on Venezuela and concerns about US sanctions on Iran which could significantly reduce Iranian oil export. In addition, ongoing deal between OPEC and Russia on cutting oil production to further tighten global oil markets, also gives results and keeps oil prices supported.
Gold prices were little changed on Wednesday as the dollar held on to gains after climbing to a fresh new high this year on Monday. Gold is mainly inversely correlated to the US Dollar Index (DXY) which saw some profit-taking in early European session helping gold reach the 1296.00 region which is a major weekly resistance zone level. Attention to the Federal Reserve’s minutes scheduled for Wednesday at 18:00 GMT to look for cues for rate hikes.