Forex Today: Consumer confidence gauges take centre stage

As market players digested news that President Trump backpedalled on his threats of levying 50% taxes on European products, the US Dollar (USD) stayed on the defensive in quite a poor start to the new trading week.

Here’s what to watch on Tuesday, May 27:

The US Dollar Index (DXY) briefly eased to five-week lows on Monday, slipping back below the 99.00 support on the back of the erratic trade policy by the White House. The Conference Board’s Consumer Confidence print will be in the spotlight, seconded by Durable Goods Orders, the FHFA’s House Price Index, and the Dallas Fed Manufacturing Index. In addition, the Fed’s Kashkari is due to speak.

EUR/USD flirted with multi-week highs north of 1.1400 the figure against the backdrop of renewed optimism on the trade front. Germany’s GfK Consumer Confidence will be published alongside the EMU’s Economic Sentiment, the final print of the Consumer Confidence, and the Consumer Inflation Expectations survey.

Extra strength sent GBP/USD to more than three-year highs just pips away from the 1.3600 barrier amid further weakness hurting the Greenback. The CBI Distributive Trades survey will be the only data release across the Channel.

Following new monthly lows near 142.20, USD/JPY managed to regain some composure and end the day with modest gains, reversing part of the multi-day leg lower. Next on tap on the Japanese docket will be the weekly Foreign Bond Investment figures and May’s Consumer Confidence, all due on May 29.

AUD/USD rose to levels last seen in late November 2024, beyond the key 0.6500 hurdle on Monday, although it receded a tad afterwards. The RBA’s Monthly CPI Indicator and Construction Work Done are next in Oz on May 28.

WTI resumed its decline on Monday, approaching the $61.00 mark per barrel despite the improved sentiment on the trade front after President Trump’s pivot regarding tariffs on the EU.

In reaction to reports that President Trump has extended the deadline for trade talks with the EU, the price of Gold pulled back from Friday's marked advance and traded near the $3,320 area per troy ounce. Similarly, Silver prices have gotten off to a slow start this week, with selling pressure building near the $33.00 mark per ounce.