In the first half of the week, investors are looking for the next catalyst. Major currency pairings have struggled to make a significant move in either direction. Nonetheless, early Wednesday’s cautious market atmosphere appears to be aiding the US Dollar’s recovery. Later in the session, Eurostat will release revisions to the March Harmonized Index of Consumer Prices (HICP). The Fed will release its Beige Book in late American trading hours.
Despite aggressive statements from Fed officials, the US Dollar Index finished in the red on Tuesday. The DXY is holding onto tiny gains early Wednesday, as US stock index futures are down between 0.2% and 0.5%. Meanwhile, the benchmark 10-year US Treasury note yield has returned to approximately 3.6% after a technical drop the previous day.
The UK’s Office for National Statistics released an inflation report on Wednesday. The CPI enclosed that the inflation rate edged lower to 10.1% yearly in March from 10.4% in February. This reading came in above the market expectation of 9.8%. The annual Core CPI stayed unchanged at 6.2% in the same period. Such condition strips volatile food and energy prices. Therefore, in accordance with the data, analysts estimate 6% to remain stable. GBP/USD gained traction early Wednesday and was last seen trading above 1.2450.
The stormy market action continues through the week
The UK also released the inflation numbers. The EUR/GBP cross came under renewed bearish pressure and fell below 0.8800.
The EUR/USD is failing to build on Tuesday’s recovery gains. However, it is still trading at just around 1.0950. Later in the day, European Central Bank Chief Economist Philip Lane will deliver presentations. Governing Council member Isabel Schnabel will join him to provide the investors with further clarification.
The USD/JPY has gained bullish momentum on rising US Treasury bond yields. It eventually surged toward the mid-134.00s. Tokiko Shimizu, Executive Director of the Bank of Japan, stated that it is reasonable to continue easing policy for the time being.
Following Tuesday’s rally, gold lost traction and fell below $2,000. Rising global yields following UK inflation statistics appear to impact the XAU/USD midweek.
Besides, Bitcoin rose more than 3% on Tuesday. It pretty much entered a consolidation period just above $30,000 early Wednesday. Ethereum is struggling to find a direction as it oscillates above $2,000.