Forex Markets US CPI inflation data will increase market volatility. Early on Wednesday, markets are relatively calm as investors wait on the sidelines.
Forex markets and investors
Early on Wednesday, markets remain relatively calm as investors wait for major occurrences that are expected to increase volatility. The Bank of Canada (BOC) will release its interest rate decision. The US Fed will publish the minutes of its March policy meeting. And the US Bureau of Labor Statistics will publish March Consumer Price Index (CPI) figures.
On Tuesday, the US Dollar had trouble holding up against its competitors as markets held off on betting on a 25 basis point Fed rate rise before seeing March inflation data. The major Wall Street indexes shut with mixed results.
The US stock index futures are trading flat early on Wednesday, indicating a cautious market stance. President of the Federal Reserve (Fed) Bank of New York John Williams stated on Tuesday that a further rate increase would be a reasonable place to start. But he also accepted that if inflation as a whole decline, rates may need to be lowered.
Forex scenario: US CPI Forecast: The US dollar is weak and likely to decline more.
Utilizing the widespread dollar’s weakness, the EURUSD recovered all of Monday’s losses on Tuesday. The duo trades over 1.0900 in the early hours of Wednesday.
On Tuesday, the GBPUSD ended a four-day falling trend and completed the day over 1.2400. In the initial Asian period on Wednesday, the duo increased above 1.2450. But it recovered its positive momentum and dropped to the 1.2420 regions in the early European session.
On Tuesday, the USDCAD saw negative pressure as well as increasing crude oil prices, losing over 50 pips in the process. Early on Wednesday, the duo is trading close to 1.3450. The BOC is anticipated to maintain its policy rate at 4.5%. In a post-meeting news conference, BOC Governor Tiff Macklem will speak on the prospects for policy and answer inquiries.
The AUDUSD currency pair is unable to make a clear move in either way and has been oscillating in a constrained range under 0.6700 since mid-week. Investors in the market will be eagerly watching the March jobs statistics from Australia on Thursday during the Asian session
After Monday’s abrupt increase, the USDJPY pair continued to consolidate on Tuesday, closing almost exactly the same. On Wednesday, the duo continues their downward crawl just over 133.50. According to data from Japan, machine orders declined 4.5% on a monthly basis in February.
Gold
The price of gold has been moving upward and recaptured $2,000 on Tuesday. Early on Wednesday, the XAUUSD pair pushed upward and was last observed trading beyond $2,010.
