Forex Today: Dollar remains pressure, catalysts missing
|What you need to know on Tuesday, May 25:
The week started in slow motion, but the greenback remained the weakest currency across the FX board. It started the day advancing modestly, but demand faded as the day went by, as US government bond yields edged lower. The yield on the 10-year US Treasury note bottomed at 1.59% and settled at 1.60%.
Federal Reserve officials were in the wires, and comments Governor Lael Brainard outstand. Among other things, he noted that the US economy is in the middle of an unprecedented economic rebound and that some bottlenecks on the supply chain contribute to inflation. He added that the Fed has the tools to deal with inflation if it moves persistently above target. On a separate event, St. Louis Fed President James Bullard noted he expects to see more inflation but added that it would mostly be temporary.
A scarce macroeconomic calendar was exacerbated by a holiday in several European countries and Canada. The EUR/USD pair recovered the 1.2200 threshold but remained below the monthly high at 1.2245.
GBP/USD bounced modestly from daily lows despite encouraging UK news. The UK reported that the number of shoppers across the kingdom was up 1.1% in the week ended May 22 amid the reopening of indoor hospitality. Also, local health officials said on Sunday that restrictions could be lifted by the end of June, as an official study found that the Pfizer and AstraZeneca vaccines offer effective protection against the Indian strain currently circulating in the kingdom. The pair settled around 1.4150
The Canadian dollar remained among the strongest after BOC’s Governor Tiff Macklem said that tapering is the right move for the Canadian economy, adding that the economy still needs a "considerable amount of monetary support" and that he is comfortable with pulling back extraordinary stimulus extended during the pandemic because of domestic economy’s resilience.
Commodities were marginally higher, helped by the good tone of Wall Street. Gold settled at $ 1,882 a troy ounce, while WTI trades near $ 66.00 a barrel.
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