The market mood is mixed with stocks stabilizing after Tuesday’s decline, while the dollar is marginally lower against most currencies. Jerome Powell, Chairman of the Federal Reserve, stands out as the Fed Chair will speak ahead of the US market open and will likely comment on negative rates.
U.S. consumer prices dropping 0.8% in April raised the possibility of deflation as the economy sinks deeper into recession, fuelling the debate about policy responses and putting pressure on the Fed to do more.
The USD/JPY pair was down to 107.13 and the GBP/USD pair has recovered and remained near 1.23 level. The EUR/USD pair is trading around 1.0850, as fears of a second wave of coronavirus in Europe and the US is holding markets back.
The US oil prices are lacking a clear directional bias for the sixth straight day. West Texas Intermediate’s front-month contract is side-lined near $25.35 at press time. Prices have been restricted to a range of $26.74 to $22.58 since last Wednesday. Gold has been edging up above the $1,700 amid a cautious market mood with all eyes are on Jerome Powell.
Moving ahead, market participants now look forward to the release of the Eurozone Industrial Production data for March at 09:00 GMT, followed by a scheduled speech by the ECB’s Chief Economist Philip Lane at 11:00 GMT.
The key focus of the day will be the Fed Chair Jerome Powell’s scheduled speech during the early North American session on Wednesday. Ahead of the speech, the US PPI data may offer fresh incentives for the Dollar. Official storage data from the U.S. Energy Information Administration due at 14:30 GMT will be also eyed.