Central bank heavyweights take center stage in Sintra

Federal Reserve (Fed) Chairman Jerome Powell, European Central Bank (ECB) President Christine Lagarde, Bank of England (BoE) Governor Andrew Bailey and Bank of Japan (BoJ) Kazuo Ueda will be speaking at a panel at the ECB Forum on Central Banking in Sintra on Wednesday. The US economic docket will feature Goods Trade Balance for May and the Fed will release the Bank Stress Test results later in the day.

After the data from the US showed that New Home Sales rose at an impressive pace in May and the CB Consumer Confidence Index improved noticeably in June, the US Dollar (USD) managed to stay resilient against its rivals late Thursday. Nevertheless, the risk-positive market environment didn’t allow the currency to gather bullish momentum. Early Wednesday, the US Dollar Index clings to small daily gains above 102.50 and US stock index futures trade modestly lower on the day.

During the Asian trading hours, the data from Australia showed that the Consumer Price Index (CPI) rose 5.6% on a yearly basis in May. This reading followed the 6.8% increase recorded in April and came in below the market expectation of 6.1%. Pressured by the soft inflation data, AUD/USD fell to its lowest level in three weeks, below 0.6650.

EUR/USD climbed toward 1.1000 and registered strong gains on Tuesday. Ahead of the ECB event, the pair stays in a consolidation channel at around 1.0950.

GBP/USD is having a difficult time holding its ground and trading below 1.2750 on Wednesday after having closed in positive territory on Tuesday.

USD/JPY rally continued and the pair reached a fresh multi-month high of 144.20 on Tuesday. “We are closely watching currency moves with a strong sense of urgency,” Japan’s top currency diplomat Masato Kanda said on Wednesday. “We will respond appropriately if it becomes excessive.” Following these comments, the pair holds steady at around 144.00.

USD/CAD gained traction and climbed above 1.3200 on Tuesday after Statistics Canada reported that the annual CPI declined to 3.4% in May from 4.4% in April. The pair continues to stretch higher early Wednesday and was last seen trading near 1.3230.

Gold failed to benefit from the broad US Dollar weakness on Tuesday as US Treasury bond yields staged a rebound. XAU/USD stays on the back foot and trades at its weakest level since early March near $1,910.

Bitcoin snapped a three-day losing streak on Tuesday but met resistance near $31,000. Early Wednesday, BTC/USD corrects lower and trades below $30,500. Ethereum continues to fluctuate in a narrow channel below $1,900 for the sixth straight day on Wednesday.