Here is what you need to know on Wednesday, May 31:
Market participants have turned cautious mid-week amid growing concerns over the US debt-limit bill facing resistance at both chambers of Congress after the House Rules Committee advanced it by a slim 7-6 margin on Tuesday. The US Dollar (USD) benefits from risk aversion mid-week ahead of JOLTS Job Openings data for April and Fedspeak. In the European session, Germany's Destatis will publish inflation data for May.
Reflecting the souring market mood, US stock index futures are down between 0.35% and 0.45%. The US Dollar Index edges higher toward 104.50 following Tuesday slide and the benchmark 10-year US Treasury bond yield is already losing 1% on the day below 3.7%.
During the Asian trading hours, the data from China revealed that the business activity in the manufacturing sector continued to contract at a slightly faster pace in May than in April with the NBS Manufacturing PMI falling to 48.8 from 49.2. In the same period, the Non-Manufacturing PMI declined to 54.5 from 56.4 but came in much higher than the market expectation of 50.7.
AUD/USD came under bearish pressure in the Asian session and the pair was last seen trading at its lowest level since early November below 0.6500. The data published by the Australian Bureau of Statistics revealed on Wednesday that the Consumer Price Index (CPI) rose 6.8% on a yearly basis in April, higher than 6.3% recorded in March. While testifying before the Senate Economics Legislation Committee, Reserve Bank of Australia (RBA) Governor Philip Lowe reiterated that entrenched inflation would lead to higher interest rates and unemployment but these comments failed to help the Aussie find a footing.
EUR/USD rose toward 1.0750 and closed in positive territory on Tuesday. The renewed USD strength, however, weighed on the pair early Wednesday and dragged it back below 1.0700. In Germany, the annual Harmonized Index of Consumer Prices is forecast to rise 6.8%, compared to 7.6% in April.
USD/CAD gathered bullish momentum and advanced to the 1.3650 area early Wednesday. Later in the day, first-quarter Gross Domestic Product (GDP) growth from Canada will be watched closely by market participants.
USD/JPY closed the second straight day in negative territory on Tuesday and continued to stretch lower early Wednesday, pressured by falling US T-bond yields. The pair was last seen trading slightly above 139.50.
GBP/USD held steady above 1.2400 on Tuesday but lost its traction mid-week. The pair stays on the back foot in the European morning and pushes lower toward 1.2350.
Gold price benefited from retreating US yields on Tuesday and rose toward $1,960. XAU/USD consolidates its recent gains on Wednesday and fluctuates above $1,950.
Bitcoin turned south early Wednesday and fell toward $27,000, losing more than 2% on the day. Ethereum registered marginal gains on Tuesday but reversed its direction on Wednesday. At the time of press, ETH/USD was down more than 1% on the day at $1,870
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.