Forex Today: Major pairs continue to fluctuate in familiar ranges

Eren Sengezer FXStreet

Here is what you need to know on Thursday, June 8:

The market action remains choppy in the second half of the week and major currency pairs stay continue to fluctuate in their weekly ranges. Eurostat will release the final revision for the first-quarter Gross Domestic Product (GDP) growth and the weekly Initial Jobless Claims will be featured in the US economic docket on Thursday.

After the Reserve Bank of Australia (RBA), the Bank of Canada (BoC) became the second major central bank this week to surprise markets with a rate hike. The BoC raise its policy rate by 25 basis points to 4.75% after having held it unchanged in the previous two meetings. In its policy statement, the BoC said that concerns have increased that Consumer Price Index (CPI) inflation could get stuck materially above the 2% target. Following this development, USD/CAD fell to its weakest level in a month near 1.3320 before stabilizing near 1.3350 early Thursday.

The BoC's unexpected hike triggered a rally in global bond yields. The benchmark 10-year US Treasury bond yield rose nearly 4% and settled at around 3.8%. Meanwhile, the CME Group FedWatch Tool's probability of one more Fed rate hike next week climbed above 30% from 20% earlier in the week. Early Thursday, US stock index futures trade flat and the US Dollar Index stays calm near 104.00.

EUR/USD extended its sideways grind and closed virtually unchanged on Wednesday. The pair stays rengebound at around 1.0700 in the European morning on Thursday.

GBP/USD registered small gains on Wednesday and was last seen trading a few pips above 1.2450.

USD/JPY closed in positive territory on Wednesday but lost its bullish momentum after meeting resistance near 140.00. The data from Japan showed that the real Gross Domestic Product grew at an annualized rate of 2.7% in the first quarter, surpassing the initial estimate of 1.6%.

Pressured by surging bond yields, Gold price turned south and broke below $1,950 on Wednesday. Early Thursday, XAU/USD consolidates its losses but stays below $1,950.

Bitcoin failed to build on Tuesday's gains and lost more than 3% on Wednesday. In the European session, BTC/USD trades in a tight channel near $26,500. Ethereum reversed its direction and declined toward $1,800 after having met resistance at $1,900 mid-week.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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