EUR/USD extends gain toward 1.0800, around the highest levels since late May, as Euro bulls brace for the key day. The pair remains on the front foot as the US Dollar tracks the US Treasury bond yields lower amid expectations of soft US CPI data.
GBP/USD is extending the bounce toward 1.2550, as the Cable traders await the UK employment report early Tuesday. The pair is underpinned by a broadly weaker US Dollar amid a cautiously optimistic market mood ahead of the key US CPI data.
The USD/JPY pair struggles to capitalize on its gains registered over the past two days and comes under some selling pressure during the Asian session on Tuesday. The pair currently trades just below mid-139.00s, down nearly 0.15% for the day and well within a familiar trading range held over the past two weeks or so.
AUD/USD justifies the market’s cautious optimism, as well as cheering the rate cut from the Chinese central bank, as it renews its intraday high near 0.6765 heading into Tuesday’s European session. That said, receding odds of the Federal Reserve’s (Fed) hawkish move during Wednesday’s Federal Open Market Committee (FOMC) weigh on the US Dollar and improve the market’s mood.
The NZD/USD pair is looking to recapture the previous day’s high of 0.6150 in the early European session. The Kiwi asset is getting strength as the US Dollar Index (DXY) is showing a non-directional performance ahead of the release of the United States Consumer Price Index (CPI) data. This time, the US CPI (May) data has become a much-anticipated one as it will provide crucial guidance for the Federal Reserve (Fed) policy. US labor market conditions have started releasing heat now, economic activities remained weak and further softening of US inflation would bolster the case of a neutral policy with hawkish guidance.
USD/CAD picks up bids to pare intraday loss as it bounces off the daily low to 1.3365 heading into Tuesday’s European session. In doing so, the Loonie pair struggles to justify the latest US Dollar weakness amid the sluggish price of Canada’s main export item, WTI crude oil. That said, the quote’s latest inaction could also be linked to the market’s cautious mood ahead of the top-tier data/events, like the US inflation and Federal Reserve (Fed) monetary policy meeting.
The USD/CHF pair oscillates in a narrow band below the 0.9100 mark during the Asian session on Tuesday and consolidates its strong gains recorded over the past two days. Firming expectations that the Federal Reserve (Fed) will more likely skip a rate hike this month continue to weigh on the US Dollar (USD) and act as a headwind for the USD/CHF pair. It is worth recalling that a slew of influential Federal Reserve (Fed) officials recently reaffirmed market expectations for an imminent pause in the US central bank’s year-long policy tightening cycle.
Oil prices rose on Tuesday, recovering a measure of steep losses from the prior session, although caution ahead of upcoming U.S. inflation data and the conclusion of a Federal Reserve meeting kept markets on edge.
Gold is lacking a clear directional bias, flatlining at around $1,960 early Tuesday. The sluggish performance of the United States Dollar (USD), in the wake of an upbeat market mood and falling Treasury bond yields, is offering some support to the XAU/USD price.
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