What You Need to Know on Wednesday, May 8:

The US Dollar (USD) remains strong against other currencies early Wednesday after seeing slight gains on Tuesday. Today’s US economic calendar includes the weekly MBA Mortgage Applications report and March Wholesale Inventories data. Additionally, investors are keeping a close eye on comments from Federal Reserve (Fed) policymakers and a 10-year note auction by the US Treasury later in the day.

On Tuesday, mixed performance in Wall Street’s major indexes and hawkish statements by Minneapolis Federal Reserve President Neel Kashkari boosted demand for the USD in the latter half of the day. After closing positively, the USD Index continued to rise during Wednesday’s Asian session, gaining nearly 0.2% to surpass 105.50. In Europe, US stock index futures are trading slightly lower, while the 10-year US Treasury bond yield remains modestly higher but still below 4.5%.

During the Asian trading session, Bank of Japan (BoJ) Governor Kazuo Ueda clarified that monetary policy is focused on impacting inflation, not the Japanese Yen’s exchange rate. He emphasized that the BoJ might adjust its policy if currency movements affect inflation trends. Despite these remarks, USD/JPY continued to rise, trading above 155.00 after closing the first two days of the week in positive territory.

On Tuesday, EUR/USD ended a four-day winning streak, closing in the red. Early Wednesday, the pair remains under pressure, trading below 1.0750.

GBP/USD dropped by nearly 0.5% on Tuesday, extending its decline to below 1.2500 midweek. The Bank of England will announce its monetary policy decisions on Thursday.

Gold couldn’t maintain Monday’s recovery momentum, closing below $2,320 on Tuesday. XAU/USD remained quiet early Wednesday, hovering around Tuesday’s closing level.

AUD/USD faced bearish pressure on Tuesday after the Reserve Bank of Australia (RBA) adopted a cautious stance on further tightening, keeping policy settings unchanged. The pair continued to decline on Wednesday, trading below 0.6600.

Key Highlights:

  • BoJ Governor Kazuo Ueda: Monetary policy aims to impact inflation, not the yen exchange rate.
  • USD/JPY: Climbs above 155.00 despite BoJ remarks.
  • EUR/USD: Trades below 1.0750, snapping a four-day winning streak.
  • GBP/USD: Falls below 1.2500 ahead of the Bank of England’s policy decision.
  • Gold: Stable around Tuesday’s closing level after slipping below $2,320.
  • AUD/USD: Extends losses as RBA adopts a less hawkish stance.

By Admin

Related Post