Investors are anticipating the outcome of US debt vote and digesting the latest economic data from China.
Spending more time together virtually may have had a lasting impact on how we communicate face-to-face and how we connect with people we work with.
The U.S. dollar gained in early European trading Wednesday after weak Chinese activity data hit risk sentiment, while the U.S. debt ceiling deal cleared an important hurdle. Elsewhere, EUR/USD fell 0.5% to 1.0685 after the German state of North Rhine Westphalia, the most populous state in the country, recorded an annual inflation rate of 5.7% in May, considerably below the 6.8% expected and the revised prior number of 6.7%.
The Indian rupee on Wednesday was unmoved by the U.S. dollar's Chinese yuan-fuelled strength, helped by the possible dollar inflows and an important support level. The rupee was at 82.64 against the U.S. dollar by 10:52 a.m. IST, compared to 82.71 on Tuesday. This is despite a further decline in the yuan, which pushed other Asian currencies lower and boosted the dollar against its major peers.
The U.S. dollar rose strongly on Wednesday to a more than two-month high after data showed European inflation is cooling quicker than expected and China's recovery is sputtering. That helped the dollar index, which measures the greenback against six major peers, climb 0.51% to 104.6, its highest since March 16. Analysts said the figures reduced the pressure on the European Central Bank (ECB) to keep raising interest rates, diminishing the euro's attractiveness relative to the dollar.
A majority of global central banks now expect gold to grow as a reserve asset while views on the US dollar turn dimmer
According to a survey by the World Gold Council, 62% of central banks expect gold will have a greater share of total reserves in coming years.
Investing.com -- Most Asian currencies fell on Wednesday, with the Chinese yuan trading at a six-month low on more signs of a slowing economic recovery in the country, while the dollar firmed ahead of a vote to raise the U.S. debt ceiling.
Investing.com -- Australian consumer price index inflation rose more than expected in April amid stubbornly high fuel and housing prices, likely inviting more interest rate hikes by the Reserve Bank in the coming months.
As inflation continues to gouge prices around the country, people are feeling the pinch in their budgets and strategizing which places to shop for the best deals. Here: 8 Companies Behind Costco's...
The US dollar is overbought and could weaken to recent lows as the next Fed meeting looms, strategist says
The greenback could see to a pullback ahead of the June Fed meeting, even as it continues to rally against the euro and yen, FxPro said.
The Canadian dollar edged lower against its U.S. counterpart on Tuesday as a drop in oil prices offset optimism that a deal to raise the U.S. debt ceiling would be passed by Congress. The loonie was trading 0.1% lower at 1.36 to the greenback, or 73.53 U.S. cents, after moving in a range of 1.3568 to 1.3613. "Under the hood, in terms of the fundamentals, you have got yield spreads giving it support and then weaker oil prices moving against it," said Eric Theoret, global macro strategist at Manulife Investment Management.
Japan will closely watch currency market moves and respond "appropriately" as needed, the country's top currency diplomat said on Tuesday after financial authorities met in response to a weakening in the yen to its softest in six months versus the dollar. Meanwhile the dollar oscillated in trading after U.S. President Joe Biden and Republican House Speaker Kevin McCarthy on Sunday signed off on an agreement to temporarily suspend the U.S. debt ceiling and cap some federal spending in order to prevent a debt default. Oil prices fell more than 4% on Tuesday as mixed messages from major producers clouded the supply outlook ahead of the OPEC+ meeting this weekend.
Japan will closely watch currency market moves and respond "appropriately" as needed, the country's top currency diplomat said on Tuesday after financial authorities met in response to a weakening in the yen to its softest in six months versus the dollar. Derek Halpenny, MUFG's head of research, global markets EMEA said the Japanese currency was coming into focus ahead of a possible election, as Japan is a major energy importer, and subsidies for petrol are nearing their end. "If [Prime Minster] Kishida is looking at a snap election, he wants to be seen to be addressing one source of energy inflation which would be currency depreciation," Halpenny said.
The Turkish lira fell 1.5% against the dollar to a new record low, an unusually large move for the currency that suggests policymakers are gearing up for a larger depreciation following Sunday's [reelection of President Recep Tayyip Erdogan](https://www.wsj.com/articles/erdogans-next-focus-turkeys-place-on-the-world-stage-bbba032d). The lira has been trading in a tight range due to the central bank’s efforts to control the currency’s decline through intervention and policies that deter demand for foreign currency. The central bank stepped up those efforts around the election, further eroding the [reserves it has left to defend the currency](https://www.wsj.com/livecoverage/stock-market-today-dow-jones-05-23-2023/card/turkey-s-foreign-reserves-erode-further-ahead-of-election-runoff-DaB2EmNuVAzBALu8QJ8Q).
The British pound has rallied significantly from the 1.2350 level, showing signs of life again on Tuesday.
The euro initially plunged below a major trend line in the 200-Day EMA, only to turn around and show signs of life.
The Aussie dollar has initially fallen during the trading session on Tuesday but turned around to find plenty of support later in the day.
Currency markets were choppy on Tuesday as the dollar hit a 10-week high against peers and a six-month top versus the yen before Japanese officials gave their currency a nudge, as investors kept a wary eye on global policy makers. Japan will closely watch currency market moves and respond "appropriately" as needed, the country's top currency diplomat said on Tuesday after financial authorities met in response to a weakening in the yen to its softest in six months versus the dollar. The yen strengthened on news of the meeting, and held onto those gains, with the dollar last down 0.2% at 140.16 yen having earlier risen as high as 140.93, its highest since November 2022.
Banks criticised for offering 'meagre' returns on customers' savings despite soaring interest rates.
The yen strengthened on Tuesday on news of a meeting of Japan's finance ministry and central bank, while elsewhere the dollar rose to a two-month high against a basket of its peers after the U.S. debt ceiling deal. The dollar was last down 0.18% against the Japanese yen at 140.18 after the country's finance ministry said senior officials from the Ministry of Finance, Bank of Japan and Financial Services Agency will meet from 5:30 p.m. (0830 GMT).
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