Markets remain choppy as investors await next catalyst

The US Dollar manages to hold its ground on the second trading day of the week with the US Dollar Index edging higher after having closed modestly higher on Tuesday. The US economic docket will feature the NFIB Business Optimism Index and the IBD/TIPP Economic Optimism Index later in the day. Market participants will continue to pay close attention to comments from central bank officials in the absence of high-tier data releases.

The cautious market stance, as reflected by the mixed performance in Wall Street’s main indexes, and the rebound seen in the US Treasury bond yields helped the US Dollar stay resilient against its major rivals on Monday. In the late American session, the US Federal Reserve’s (Fed) Senior Loan Officer Opinion Survey showed that  survey respondents reported, on balance, tighter standards and weaker demand for commercial and industrial (C&I) loans to large and middle-market firms, as well as small firms, over the first quarter.

In the Asian trading hours on Tuesday, the data from China revealed that the trade surplus widened to $90.2 billion in April from $88.19 billion in March. This reading surpassed the market expectation of $71.6 billion by a wide margin. Meanwhile, Retail Sales in Australia contracted by 0.6% in the first quarter, compared to analysts’ estimate for a decrease of 0.4%. Following these data releases, AUD/USD stays on the back foot and trades in negative territory at around 0.6750 after having reached its highest since mid-April above 0.6800.

Following a consolidation phase near 1.1000 in the Asian session, EUR/USD started to edge lower in the European morning. European Central Bank (ECB) policymaker Martins Kazaks said on Tuesday that the rate-hiking may not be finished in July but this comment failed to help the Euro gather strength.

GBP/USD registered small losses on Monday and retreated to the 1.2600 area early Tuesday. Following a three-day weekend, the UK’s FTSE 100 Index opened marginally lower.

Gold price struggled to gather bullish momentum amid rising US T-bond yields and finished the day virtually unchanged on Monday. Early Tuesday, XAU/USD continues to fluctuate in a tight range at around $2,020.

USD/JPY extends its sideways grind near 135.00 on Tuesday. Bank of Japan (BoJ) Governor Kazuo Ueda said earlier in the day that the impact of recent US and European bank failures on Japan’s financial system was likely limited.

Bitcoin lost nearly 3% and broke below $28,000 on Monday. BTC/USD stays relatively quiet early Tuesday and trades above $27,500. Ethereum closed in negative territory for the third straight day and came within a touching distance of $1,800 before going into a consolidation phase on Tuesday.