Forex Today: Risk-off on pause, dollar retreats modestly

What you need to take care of on Tuesday, May 17:

The American dollar appreciated at the beginning of the week but ended the day with modest losses against most rivals as stocks markets changed course. European indexes closed mixed, but Wall Street managed to post gains.

The EUR/USD pair ended the day at around 1.0430, with the bullish potential limited amid persistent tensions with Russia.  Ministers from the Union were unable to agree on a Russian oil import embargo, with Hungary, the Czech Republic and Slovakia being the main opponents. Also, the European Commission reviewed its economic growth projections to the downside amid the war in Ukraine, while they now see inflation rising at a faster pace this year and holding above the European Central Bank target through 2023.

GBP/USD is changing hands at around 1.2310. Brexit-related headlines are once again in the spotlight after UK PM Boris Johnson's spokesman noted they want to make significant changes to the Northern Ireland protocol, although clarifying they believe that it is possible within the protocol framework.

Additionally, Bank of England Governor Andrew Bailey testified before the House of Commons Treasury Committee. He said he is not at all happy about the inflation outlook and that it is a bad situation to be in, but added that over 80% of the UK's inflation overshoot is due to energy and tradeable goods. BOE’s member Saunders noted that Brexit might worsen UK inflation.

AUD/USD trades around 0.6960, helped by gold, as the latter trades above $1,820 a troy ounce. The USD/CAD pair plunged to 1.2646 as crude oil prices soared, with WTI now trading at $111.30 a barrel.

Safe-haven currencies posted modest gains against the greenback.

This week, the UK, the EU and Canada will publish inflation data.

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