Forex News Today - The dollar weakened against most major currencies on Tuesday as traders awaited critical U.S. and eurozone inflation data, which could shape expectations for central banks' monetary policy.

Forex trading today: Dollar’s Decline Amid Upcoming Inflation Data!

In Forex trading today, the US dollar suffered broad losses on Tuesday as investors await a flood of US and eurozone inflation data they expect to tip the scales in favor of the Federal Reserve and the European Central Bank deciding not to hike interest rates further, reports Forbes.

Forex Trading Today: Overview

The currency is also on track for its first monthly decline this year. The greenback took a step back as weaker US economic data and better-than-expected data from the eurozone combined with the Fed’s resistance to further tightening as key reasons behind the slowdown, said Athanasios Vamvakidis, global head of forex strategy at BofA.

Forex Trading Today: Market Sentiment and Rate Cuts

Meanwhile, the pricing for Forex trading shows a US rate cut fully baked into markets for December (80% likelihood) and about 60% likelihood for November and September, respectively.

The ICE dollar index, which measures the performance of the greenback against a basket of six currencies, was 0.09% lower at 104.47 – a 1.76% decline for the month.

The euro rallied about 0.13% to $1.0872 to erase some of its 1.8% monthly loss, despite echoes of dovish comments from several European Central Bank policymakers.

Forex News Today: ECB Expectations

 The ECB’s François Villeroy de Galhau, governor of the French central bank, said a first cut was ‘clearly on the table next week, assuming no surprises’.

Nonetheless, investors trimmed projections for future ECB moves over the next two years, pricing in fewer cuts through 2024 and February 2025.

Latest Market News: European Stocks Edge Higher Amid Economic Shifts!

German inflation numbers should add further clues on the timing of an ECB easing, due on Wednesday; the broader eurozone figure is released on Friday.

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Forex News Today: US Consumer Confidence

The dollar received a boost from a rise in US consumer confidence this month, better than had been expected in some surveys.

That said, it was always going to take a back seat to the US core personal consumption expenditures (PCE) price index – the preferred due to the Fed’s decision to follow core inflation tightly.

This is the real rate mover for markets in the US session on Friday.

The Fed would like it to remain steady on the month. Looking across foreign exchange markets today, we find the consensus remains that the market is priced for benign data following an upside surprise in the US figures.

Forex News Today: Neutral Policy Debate

Meanwhile, ahead of major economic data releases, including the US non-farm payrolls report on Friday, ‘as more people start to debate the Fed’s implied neutral policy stance, it might take stronger-than-expected upside surprises to shake sentiment,’ said Derek Halpenny, head of research, global markets EMEA at MUFG Bank in Hong Kong.

The prospect of a later rise in the so-called R-Star, a neutral underlying interest rate that some Fed officials say has fallen since the financial crisis, was bolstered last week with comments from Fed governor Christopher Waller.

Economy unexpected economy to the upside could lead to market yield liftoff if it doesn’t slow as expected, Waller said in an Asia Society webinar late last week.

Forex News Today - The dollar weakened against most major currencies on Tuesday as traders awaited critical U.S. and eurozone inflation data, which could shape expectations for central banks' monetary policy.
Forex News Today – The dollar weakened against most major currencies on Tuesday as traders awaited critical U.S. and eurozone inflation data, which could shape expectations for central banks’ monetary policy.

Forex News Today: Dollar-Yen Dynamics

The dollar/yen pair traded around 157, last at 156.92, up 0.04%. Vamvakidis said a cut by the Fed in 2024 might still take the yen up to 160.’

But ‘if the Fed starts cutting interest rates in 2025, then 160 becomes a promising target for the yen again, then the Japanese authorities will intervene again.’

This week, the Bank of Japan’s (BOJ) key measures of core hourly work rates – including core consumer price and core imported goods price TION, all fell below a 2% target for underlying inflation in April, raising questions about when the BOJ will lift short-term interest rates.

Forex News Today: Sterling and the New Zealand Dollar

 Sterling and the New Zealand dollar both push higher, climbing to two-month highs of $1.2772 and $0.6151, respectively.

Aussie edges up 0.12%. Australian monthly consumer price data on Wednesday. bitcoin  ̶ Down 2.41 % to $67,908  ̶ ether ̶ Down 1.28 % to $3,838.80 

Forex News Today: Global Equities and Treasury Yields

A global index of equities sagged on Tuesday, while Treasury yields rose, as investors looked ahead to inflation data later in the week for clues about the outlook for U.S. interest rates.

US. consumer confidence unexpectedly improved in May, tracking an uptick in optimism about jobs after three straight months of declines.

Trading Oil Price Plummets – What You Need to Know Now

Earlier, U.S. house price growth decelerated sharply in March as higher mortgage rates began to weigh on the market.

Forex News Today: Key Inflation Data

 Investors will then get the U S core Personal Consumption Expenditures Price Index report for April on Friday – the Fed’s preferred inflation barometer, which is expected to remain unchanged month-on-month.

Kim Forrest, chief investment officer at Bokeh Capital Partners, told Forbes: ‘My theory is that we need interest rates, real interest rates, to come down a little bit, and if inflation slows, it’ll give a Fed cover to [lower rates] even more.

Forex News Today: Market Performance

 In New York on Tuesday, the Dow Jones Industrial Average took a hit, falling 160.86 points, or 0.41%, to 38,908.73; the SP 500 lost 0.90 points, or 0.02%, to 5,303.82; and the Nasdaq Composite rose 66.46 points, or 0.39%, to 16,987.26. Data on European inflation will be out later this week.

Forex News Today: Treasury Market Dynamics

The 10-year Treasury note yield initially turned negative after the release of the housing-price data but then regained the loss after the consumer confidence survey.

Supply could provide some headwind to bonds on Tuesday, though, with the sale of $69 billion in new US and $70 billion in five-year Treasuries.

U.S. 10-year note yields were up 1.4 basis points at 4.487%, and the 30-year. The yield on the two-year note, which tends to move with expectations around interest rates, was down 2.4 basis points at 4.9289%.

Forex News Today: Currency Movements

The dollar index, which tracks the greenback against a basket of currencies including the yen and the euro, lost 0.09% to 104.47.

The euro gained 0.12% to $1.0871.

Against the Japanese currency, the dollar was slightly stronger at 156.87. Crude oil prices jumped worldwide; US crude gained 2.26% to $79.48 a barrel, and Brent crude rose 0.84% to $83.8 a barrel.

Forex News Today: Precious Metals

Prices for gold in dollars held firm because, while the greenback did reverse some rate gains, investors were also waiting for US inflation numbers. Spot gold rose 0.18% to $2,354.98 an ounce, and U.S. gold futures added 1.17% to $2,359.70. 

Forex News Today: Sterling Performance

Sterling, however, managed to hold onto multi-month highs against the euro and reached a fresh two-month peak against the greenback after the recent BoE rate cut. A rise in investor risk appetite further bolstered the pound.

Another set of international inflation readings could give valuable hints on the global interest rate outlook this week.

Germany will publish its consumer price numbers on Wednesday ahead of its European counterparts’ inflation reading on Friday. In the United States, the core PCE price index follows suit.

Forex News Today: Market Sentiment on Sterling

 Sterling was flat on the day at $1.2768 after reaching $1.2783 earlier in the session, a level not seen since 21 March.

The euro was up 0.14% against the pound at 85.14 pence per euro, as analysts said buoyant services inflation in April this month and other key indicators were pushing back expectations of the BoE’s first rate cut beyond August.

Forex News Today: UK Political Landscape

 The number of lawmakers resigning, by the way, has passed the point before the Conservatives’ disastrous election defeat in 1997 when a third of them walked out.

Yet investors expect the result of the 4 July UK general election won’t affect sterling much.

Labor and the Tories have both pledged to stick to the existing fiscal rules enforced by the independent Office for Budget Responsibility.

Forex News Today: Indian Rupee Movements

The Indian rupee was steady on Tuesday, with traders expecting the currency to trade in a narrow range until the outcome of India’s general election.

The partially converted rupee was at 83.1325 against the US dollar by 0550 GMT, close to Tuesday’s close.

Traders are expecting the rupee to remain range-bound until the election results come out.

Forex News Today: Asian Currency Trends

 The dollar index fell 0.1% to 104.4, while other Asian currencies strengthened, with the Korean won leading the charge with a rise of 0.6%.

Rupee moves would likely follow herd flows in equity markets: some equity flow is expected ahead of the election outcome even as global FII flows for India get turbo-charged invisibly by the MSCI Global Standard index rejig.

Analysts estimate peg passive inflows at slightly over $2 billion.

Forex News Today: Fed Rate Expectations

Some Federal Reserve speakers will likely provide further insight into the pace of policy tightening later on Tuesday.

The chance that the Fed will leave rates unchanged in September, based on CME’s FedWatch tool, has risen to 50% from roughly 38% a week earlier. 

Forex Trading Today: Summary

Despite some support from an improvement in US consumer confidence, the dollar weakened further against all of the major currencies (except the Swiss franc and the euro) as markets gear up for the key U.S. and eurozone inflation data that will set the tone for each central bank’s stance on monetary policy going forward.

Treasury yields rose, while global oil prices increased and gold edged up by ‘just enough not to fall’. Sterling and the New Zealand dollar traded just above two-month highs boosted by expectations for BoE rate cuts.

And, the Indian rupee was little changed but ready to etch a record high, as investors wait for India’s general election results.

Forex Trading Today: Key Highlights

Market Anticipation and Rate Cuts: Another key factor in the forex trading analysis for today is the anticipation for US rate cuts and how they impact the markets, with the dollar index being 0.09% down. 

The ECB may cut rates again, according to the latest report by forex trading today. German and eurozone inflation figures are due this week.

U.S. Consumer Confidence: Forex trading today indicates improved U.S. consumer confidence, boosting market optimism.

 In the neutral policy debate, Forex trading notes that the implied Fed neutral policy stance can lead to the moving of market yields. 

 Dollar-Yen Movements: Forex markets focus on a jump in Yen as the Fed ponders a rate cut. 

 Sterling and NZ Dollar: Multi-month highs for sterling and NZ dollar Today, the foreign-exchange market reports sterling and the New Zealand dollar at multi-month highs.

 Global Equities and Treasury Yields Rise as US Inflation in Frame: Foreign-exchange trading today brings news that global equities and Treasury yields rose ahead of the release of US inflation data.

 Main Inflation Information: Forex trading today focuses on the upcoming US core PCE price index and the interpretations behind it. 

Precious Metals: Forex trading today shows gold prices holding steady amid dollar movements.

 Indian Rupee Fluctuations: The Forex market’s macro outlook today focuses on the range-bound trading of the Indian rupee before election results are announced. 

 It is an expert update on forex rates today. It details how various movements of currencies, inflation rates, and central banks play a significant role in forex trading.

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