EURUSD
- EUR/USD Losses: The EUR/USD pair extended its losses to near 1.0850 during the Asian session on Wednesday.
- Fed Rate Cut Timing: US investors are struggling to predict the timing of the Federal Reserve’s (Fed) first rate cut.
- Fed's Stance on Inflation: Neel Kashkari, President of the Reserve Bank of Minneapolis, emphasized that the Fed should wait for significant progress on inflation before reducing interest rates.
- ECB Rate Decisions: European Central Bank (ECB) Board members are inclined to reduce rates in June, but uncertainty remains regarding interest rate decisions beyond the summer.
- Upcoming US Data: Key US data, including Gross Domestic Product (GDP) and the Personal Consumption Expenditure (PCE) Price Index, is set to be released on Thursday and Friday.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The EUR/USD pair extended its losses amid ongoing speculation about the timing of the Federal Reserve's rate cuts, with Fed officials like Neel Kashkari stressing the need for significant inflation progress before easing policy. Meanwhile, ECB board members are leaning towards a rate cut in June, though future decisions remain uncertain. Key upcoming US economic data, including GDP and PCE Price Index figures, will be crucial in shaping market expectations and influencing the EUR/USD movement.
GBPUSD
- GBP/USD Mild Losses: GBP/USD trades with mild losses around 1.2760 during the Asian session on Wednesday.
- US Consumer Confidence: The US Consumer Confidence improved slightly in May, rising to 102.0 from 97.0 in April, according to the Conference Board's report on Tuesday.
- Hawkish Fed Comments: US Federal Reserve officials delivered more hawkish comments, which broadly boosted the US Dollar.
- IMF UK Growth Forecast: The International Monetary Fund (IMF) raised the UK growth forecasts but anticipated two to three rate cuts from the Bank of England (BoE). Election speculation may influence Cable in the absence of top-tier UK economic data.
- Upcoming Fed Events: The Federal Reserve's Beige Book is due later on Wednesday, and Fed's John Williams is scheduled to speak.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: GBP/USD trades with mild losses around 1.2760 as US Consumer Confidence improved to 102.0 in May, bolstering the Dollar amid hawkish Fed comments. The IMF raised UK growth forecasts but predicted multiple rate cuts from the BoE, with election speculation potentially impacting the pair. Investors are also looking ahead to the Fed’s Beige Book and a speech from John Williams later today for further direction.
GOLD
- Gold Price Decline: Gold price is posting small losses below $2,355, pausing a three-day recovery early Wednesday.
- US Dollar Strength: The US Dollar found fresh buyers in Tuesday’s American trading, as risk sentiment soured due to escalating geopolitical tensions in the Middle East.
- Fed Governor Bowman’s Stance: Fed Governor Michelle Bowman indicated she would have preferred a slower pace in quantitative tightening, or a more moderate tapering process than recently announced.
- Kashkari’s Hawkish Remarks: Fed's Neel Kashkari emphasized the need for significant progress on inflation before considering rate cuts, which also favored the Greenback.
- Chinese Gold Imports Decline: Falling Chinese gold imports negatively impact the gold price, with China Customs data showing a 30% drop in gold shipments for non-monetary use in April compared to the previous month.
Closing statement: Gold prices are posting small losses below $2,355 after a three-day recovery, impacted by a stronger US Dollar amid soured risk sentiment due to geopolitical tensions in the Middle East. Fed Governor Bowman’s preference for a slower pace of quantitative tightening and Kashkari’s hawkish remarks on inflation supported the Dollar. Additionally, a significant decline in Chinese gold imports weighed negatively on gold prices.
CRUDE OIL
- WTI Crude Oil Price: Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $80 on Wednesday.
- US Interest Rates Impact: The higher-for-longer US interest rate narrative continues to weigh on oil, as it increases borrowing costs, potentially dampening economic activity and oil demand.
- OPEC+ Meeting: The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia (OPEC+), will hold a virtual meeting on June 2 to review their production policy.
- OPEC+ Output Reduction: OPEC+ is widely anticipated to maintain its current level of output reduction until the end of the year.
- China's Economic Growth Forecast: The International Monetary Fund (IMF) upgraded China’s 2025 economic growth target to 4.5% from 4.1%. This positive development regarding China's economic outlook could support WTI prices, given China's significant role as the world's biggest oil importer.
| SMA (20) | Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: Western Texas Intermediate (WTI) crude oil is trading around $80, influenced by the higher-for-longer US interest rate narrative that may dampen economic activity and oil demand. The upcoming OPEC+ meeting is expected to maintain the current output reduction, potentially providing support to oil prices. Additionally, the IMF's upgraded economic growth forecast for China, the world's largest oil importer, could further bolster WTI prices.
DAX
- German Wholesale Prices: German wholesale prices declined by 1.8% year-on-year in April, showing a smaller decrease compared to the 2.6% drop in March, signaling a potential pickup in demand.
- ECB Consumer Expectations Survey: The ECB Consumer Expectations Survey showed a slight reduction in consumers' inflation expectations for the next 12 months, from 3.0% to 2.9%.
- German Consumer Confidence: German consumer confidence has risen for the fourth consecutive month, driven by improved purchasing power amid easing inflation.
- German Inflation Numbers: On Wednesday, German inflation numbers are expected to attract investor attention, with an anticipated increase in the annual inflation rate from 2.2% to 2.4%. Higher-than-expected figures could dampen hopes for a post-June ECB rate cut.
- Impact on DAX: Near-term trends for the DAX will depend on the Eurozone and US inflation numbers. Higher-than-expected inflation figures could influence investor expectations for rate cuts and affect demand for riskier assets.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: German wholesale prices showed a smaller decline in April, suggesting improving demand, while the ECB Consumer Expectations Survey indicated slightly lower inflation expectations. Rising consumer confidence in Germany, bolstered by easing inflation, reflects a positive outlook. However, upcoming German inflation data and its potential impact on ECB rate cut expectations will be crucial for DAX trends. Investor sentiment will also hinge on broader Eurozone and US inflation figures, which could influence market dynamics and demand for riskier assets.