What you need to know on Wednesday, June 21:
The US Dollar kept grinding higher on Tuesday as the market mood soured on fears that Chinese economic growth has lost momentum. The focus now shifts to Federal Reserve Chairman Jerome Powell's testimony before Congress.
The People's Bank of China (PBoC) cut two key lending rates for the first time in almost a year amid concerns about slowing growth. The central bank cut the one-year loan prime rate by 10 basis points from 3.65% to 3.55% and the five-year loan prime rate by 10 basis points from 4.3% to 4.2%.
The Reserve Bank of Australia (RBA) published the Minutes of its latest meeting. The document showed that Broad discussed two options, either increasing the cash rate by 25 basis points (bps) or holding it unchanged. Arguments were "finely balanced," but policymakers ended up opting for a hike amid increased risk inflation would take longer to return to target than had been expected. AUD/USD plunged, ending the day at around 0.6780.
Japanese authorities came out with some verbal intervention after USD/JPY hit 142.24, a fresh 2023 yearly high. Finance Minister Shun'ichi Suzuki said that FX stability is important, adding they are watching FX moves closely on a daily basis. USD/JPY shed roughly 100 pips on Tuesday.
Upbeat United States data gave the US Dollar another push early in the American session, as Building Permits were up by 5.2% MoM in May, while Housing Starts surged 21.7%, well above the market's expectations.
EUR/USD finished the day little changed, just above the 1.0900 mark after briefly piercing the level. European Central Bank (ECB) Governing Council member Olli Rehn hit the wires. Rehn noted that underlying inflation is easing only gradually "but not to the extend desired." His hawkish words reaffirmed the message delivered by the central bank last week and came as a no-surprise to financial markets.
GBP/USD hovers around 1.2750 as investors await UK inflation data and the Bank of England Monetary policy decision.
XAU/USD shed roughly $20 at the beginning of the American session, briefly piercing the $1,930 level, to end the day closer to $1,940, down for a third consecutive day.
Like this article? Help us with some feedback by answering this survey:
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.