Forex Today: AUD and NZD continue to outperform, while USD gets support from Treasury yields

On Tuesday, New Zealand will report Electronic Card Retail Sales, Japan will release Household Spending data, and Australia will release Retail Sales. China will publish trade data, and the Australian Westpac Consumer Confidence for May is due. In the Australian evening, Treasurer Jim Chalmers will present the budget. The key report of the week will be US consumer inflation on Wednesday.

Here is what you need to know on Tuesday, May 9:

Wall Street opened the week with mixed results. Market participants are digesting last week's developments, including central bank meetings and US labor market data. The Federal Reserve bank survey showed no major surprises as banking concerns continue to ease, supporting market sentiment. Incoming US inflation data, with the Consumer Price Index (Wednesday) and the Producer Price Index (Thursday), will be critical.

The US dollar rose during the American session, boosted by higher US yields, but commodity currencies outperformed, extending last week's rally. The DXY rose modestly to 101.30 and still remains near the crucial 101.00 support area.

Germany reported a decline of 3.4% in industrial production in March, worse than the expected 1.5% slide. The Eurozone Sentix Investor Confidence for May worsened from -8.7 to -13.1. EUR/USD pulled back to the 1.1000 area as it continues to move sideways.

Regarding German industrial production data, analysts at Commerzbank wrote:

Industrial production fell unexpectedly sharply by 3.4% in March. This meant that a considerable part of the gains achieved in the past two months was lost again. Due to the recent weakening of demand, a further decline in output is expected in the coming months. Instead of the economic recovery expected by many, a mild recession is more likely in the second half of the year.

GBP/USD hit fresh multi-month highs before pulling back toward 1.2600. The rally lost momentum as it approached the 100-day Simple Moving Average, which awaits at 1.2700. The Bank of England will announce its decision on Thursday, and market participants expect a 25 basis points rate hike.

USD/JPY moved sideways around 135.00 on Monday, with little change. The minutes of the Bank of Japan's (BoJ) March 9-10 meeting offered no surprises. On Thursday, the BoJ will release the summary of opinions from the April 27-28 meeting.

AUD/USD hit 0.6803, the highest intraday level since April 14, before pulling back modestly. It remains bullish, looking at the critical 0.6800 resistance area. Australia will report Retail Sales, Westpac will release the Consumer Confidence Index, and the government will announce the budget.

NZD/USD rose for the fifth consecutive day and peaked at 0.6358. The Kiwi posted the highest daily close since February, boosted by the improvement in risk sentiment.

The Loonie lagged with USD/CAD ending flat around 1.3370/80, after approaching 1.3300.

Crude oil prices extended their recent recovery, rising more than 2%. Metals posted mixed results: Gold rose marginally, ending above $2,020, while Silver fell modestly to $25.50.

Cryptocurrencies tumbled on Monday, with Bitcoin losing almost 5%, falling to $27,500.

The Chilean Peso (CLP) rallied after right-wing candidates won 33 of the 50 seats in Chile's Constitutional Convention vote. USD/CLP dropped to 786.15, reaching the lowest level since February, but then rebounded towards 800."