Aussie drops after wages data
The Australian dollar fell against most major rivals on Wednesday following labor data.
Australian wages rose 0.9% in the first quarter of the year, above estimates of 0.8%.
On trading, the AUD/USD pair rose 0.7% as of 20:56 GMT to 0.6428.
Loonie
The Canadian dollar fell 0.3% against the greenback as of 20:56 GMT to $0.7155.
The US Dollar
The dollar index was little changed at 101.01 as of 19:43 GMT, with a session-high at 101.08, and a low at 100.2.
Fed Deputy Governor Philip Jefferson said that latest inflation data shows progress towards achieving the 2% inflation target.
However, he believes the outlook has become unclear due to the latest tariffs and their potential impact on prices.
Jefferson said he supported the decision to maintain rates unchanged at the Fed’s last meeting, for it remains “moderately restrictive” and suitable for future economic developments.
Jefferson continues to consider the labor market as strong, with first quarter GDP contraction reflecting distorted data due to higher imports.
Otherwise, the Washington Post reported that Russia and Ukraine will hold their first high-level talks since 2022 in Istanbul, under mounting western pressure to agree on a 30-day ceasefire as a step towards peace.
US State Secretary Marco Rubio is scheduled to join the talks to bolster the chances of a deal, while Ukrainian President Zelensky called for a summit meeting with Russian President Vladimir Putin.
Positive results from the talks would bolster investor confidence and risk appetite in the markets.
Gold drops 2% to below $3200 an ounce
Gold prices fell on Wednesday as the dollar stabilized against most major rivals, while trade tensions cooled as investors shunned safe havens.
The Washington Post reported that Russia and Ukraine will hold their first high level talks since 2022 in Istanbul, under mounting western pressure to agree on a 30-day ceasefire as a step towards peace.
US State Secretary Marco Rubio is scheduled to join the talks to bolster the chances of a deal, while Ukrainian President Zelensky called for a summit meeting with Russian President Vladimir Putin.
Positive results from the talks would bolster investor confidence and risk appetite in the markets.
Otherwise, the dollar index was little changed at 101.01 as of 19:43 GMT, with a session-high at 101.08, and a low at 100.2.
On trading, gold spot prices fell 2.1% as of 19:44 GMT to $3180 an ounce.
Wall Street climbs with support from the tech sector
US stock indices rose on Wednesday as the tech sector rebounded while trade tensions cooled between the US and China.
The Washington Post reported that Russia and Ukraine will hold their first high level talks since 2022 in Istanbul, under mounting western pressure to agree on a 30-day ceasefire as a step towards peace.
US State Secretary Marco Rubio is scheduled to join the talks to bolster the chances of a deal, while Ukrainian President Zelensky called for a summit meeting with Russian President Vladimir Putin.
Positive results from the talks would bolster investor confidence and risk appetite in the markets.
On trading, Dow Jones rose 0.2% as of 15:29 GMT to 42219 points, while S&P 500 rose 0.1% to 5891 points, as NASDAQ added 0.4% to 19094 points.
US dollar backs off five-week high on profit-taking
The dollar fell in European trade on Wednesday away from recent five-week highs on profit-taking while US treasury yields stalled.
Even as inflationary pressures receded clearly, markets still await more decisive clues on the path ahead for US interest rates.
The Index
The dollar index fell 0.7% today to 100.27 with a session-high at 101.02.
On Tuesday, the index lost 0.85% on profit-taking away from a five-week high at 101.98.
US Yields
US 10-year treasury yields fell 0.7% tiday away from a five-week high at 4.505%, thus pressuring the greenback.
Trade Tensions
The US said it’ll reduce tariffs on low-cost Chinese shipments, worth less than $800, to 30%, reducing the severity of the trade war even further.
On Monday, President Trump said he doesn’t expect tariffs on Chinese goods will return to 145% after the 90-day pause, adding he expects to reach a final deal with Beijing.
US Rates
Recent US inflation data missed estimates, showing reduced inflationary pressures on Fed policymakers.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in June stood at just 8%, and the odds of such a cut in July stood at 40%.
Traders are now pricing in 50 basis points of US interest rate cuts this year, likely starting next September.