US dollar traded mixed, practically flat against its major peers.
The US Dollar (USD) trades practically flat in Wednesday’s European session, giving up previous gains and returning to the 105.00 mark ahead of two significant economic events. The US Consumer Price Index (CPI) release for May and the US Federal Reserve’s (Fed) interest rate decision.
The forthcoming May US CPI announcement and the Fed interest rate decision have traders on edge.
Meanwhile, in the lead-up to the US report, markets may digest and let the dust settle on the turbulence in Europe and its recent election result. Market forecasts for the monthly core CPI are extremely narrow. Ranging from a low of 0.2% to a high of 0.3%. Moreover The headline CPI is predicted to range between 0.1% and 0.2%. Moreover If the actual CPI statistic falls below the lowest estimate or exceeds the highest. The US Dollar Index (DXY) is likely to move significantly.
Daily Market movers: US Dollar Index falls to 105.00 and is expected to experience some volatility.
Association (MBA) announces the Mortgage Applications figure for the week ending June 7. The prior week, a large 5.2% fall was reported, with no expectations.
Furthermore At 12:30 GMT, the US Bureau of Labor Statistics will issue the US Consumer Price Index for May.
Monthly core inflation is predicted. To steadily increase by 0.3%.
Monthly headline inflation is expected to rise by 0.1% from the 0.3% increase in April.
Yearly core inflation is predicted to ease slightly to 3.5% from 3.6% in April.
Yearly headline inflation is expected to remain constant at 3.4%.
Markets will analyze the CPI announcement until 18:00 GMT, when the US Federal Open Market Committee (FOMC) issues its statement on the Federal Reserve’s interest rate decision. As markets have fully priced in an unchanged rate of 5.50%, the dot plot, which allows all Fed members to pencil in their projections and forecasts for future monetary policy, will become increasingly relevant.
Moreover Fed Chairman Jerome Powell will take the stage at 18:30 GMT to offer a speech with questions. and replies to recent monetary policy decisions.
Asian equities are down in Japan and China. Europe appears to be reversing the losing trend and trading in the green, as do US futures.
The CME FedWatch Tool predicts a 47.4% chance that the Fed’s interest rate will remain unchanged in September. The odds for a 25 basic points rate decrease stand at 48.3%. While a very low 4.3% possibility is put in for a 50 basic points rate cut.
Moreover The benchmark 10-year US Treasury Note has fallen to its lowest level this week. Approaching 4.4%, and is poised for additional losses.
