Market Roundup
• US ADP Employment Change Weekly (May): 35.75K, 40.80K previous
•US Redbook (YoY): 9.0%, 8.1% previous
•US Richmond Services Index (May): 14, 9 previous
•US Richmond Manufacturing Index (May): 13, 4 previous
•US Richmond Manufacturing Shipments (May): 16, -2 previous
•US Texas Services Sector Outlook (May): -7.7, -9.9 previous
•US Dallas Fed Services Revenues (May): 5.0, 4.3 previous
Looking Ahead Economic Data (GMT)
• 01:00 New Zealand ANZ Business Confidence (May) -10.6 previous
• 01:00 New Zealand NBNZ Own Activity (May) 19.6% previous
•02:30 Australia Private New Capital Expenditure (QoQ) (Q1) 1.2% forecast, 0.4% previous
•02:30 Australia Plant/Machinery Capital Expenditure (QoQ) (Q1) -1.7% previous
•02:30 Australia Building Capital Expenditure (MoM) (Q1) 2.3% previous
Looking Ahead Events And Other Releases (GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro edged lower against the dollar on Wednesday as investors remained cautious after Iran accused the United States of violating a ceasefire by striking targets near the Strait of Hormuz, complicating efforts to end the conflict. Market participants also awaited comments from Federal Reserve policymakers, including Vice Chair Philip Jefferson and Governor Lisa Cook, for clues on the outlook for U.S. monetary policy amid persistent inflation concerns. Attention is also turning to Thursday’s U.S. Personal Consumption Expenditures (PCE) data, a key inflation gauge closely watched by the Fed. Meanwhile, the U.S. dollar index, which tracks the greenback against a basket of six major currencies, slipped 0.05% to 99.07 after rising 0.15% in the previous session. Immediate resistance can be seen at 1.1648(May 25th high), an upside break can trigger rise towards 1.1693(SMA 20).On the downside, immediate support is seen at 1.1577(23.6%fib), a break below could take the pair towards 1.1561(Lower BB).
GBP/USD: The pound fell for a second day against the dollar on Wednesday as doubts about the likelihood of peace in the Middle East made traders cautious.The nearly 7% drop in the oil price this week has given some respite to the currencies of more import-dependent nations, which include sterling, but overall, trading ranges have been narrow and volatility has been contained, reflecting a lack of conviction among investors.Iran said on Tuesday U.S. strikes near the Strait of Hormuz represented a "gross violation" of a ceasefire in place for nearly seven weeks. The U.S. said its attacks were defensive in nature. Most market participants believe a resolution to the conflict is more likely than a full-on escalation, but the level of uncertainty is high. Money markets show traders expect the Bank of England to hike rates once this year, with a less than 50% chance of a second for now. Immediate resistance can be seen at 1.3505(SMA 20), an upside break can trigger rise towards 1.3526(50%fib).On the downside, immediate support is seen at 1.3473(Daily low), a break below could take the pair towards 1.3382(61.8%fib).
USD/CAD: The Canadian dollar weakened to a six-week low against its U.S. counterpart on Wednesday, as oil prices dropped and investors focused on the review of a continental free trade pact that has shielded much of Canada's goods from U.S. tariffs. The Trump administration's trade agency said it will kick off the first of three negotiating rounds with Mexico this week to revamp the United States-Mexico-Canada Agreement, but made no mention of any talks with Canada.The price of oil, one of Canada's major exports, was trading 4.5% lower at $89.63 a barrel after Iranian state TV said it had seen a draft of an initial, unofficial framework for an agreement between Iran and the United States on ending their conflict and reopening the Strait of Hormuz.The loonie was trading 0.2% lower at 1.3830 per U.S. dollar. Immediate resistance can be seen at 1.3855(38.2%fib), an upside break can trigger rise towards 1.3877(Higher B).On the downside, immediate support is seen at 1.3806(May 28th low), a break below could take the pair towards 1.3783(50%fib)
USD/JPY: The U.S. dollar edged higher on Wednesday as cautious traders weighed up the risks of a renewed flare-up in the Iran war . Iran said on Tuesday the United States had violated a ceasefire by striking targets near the contested Strait of Hormuz, potentially complicating efforts to bring the war to a close.BoJ Governor Kazuo Ueda said central banks should not focus on oil prices alone, as temporary shocks can become persistent through wages and inflation expectations. The yen was steady at 159.45 per dollar on Wednesday, its weakest since April 30, when Japanese authorities stepped into the market to buy the currency. The 160 level is viewed by many traders as a threshold that could trigger intervention, as it proved to be last month, when the yen crossed that point. Immediate resistance can be seen at 159.45(38.2%fib) an upside break can trigger rise towards 160.00(Psychological level) .On the downside, immediate support is seen at 158.67(50%fib) a break below could take the pair towards 158.27(April 16th low ).
Equities Recap
European shares closed little changed on Wednesday, hovering near record highs seen before the Iran conflict began, as gains in autos and chemicals were offset by ongoing geopolitical concerns and energy market uncertainty.
UK's benchmark FTSE 100 closed up by 0.13 percent, Germany's Dax ended down by 0.03 percent, France’s CAC finished the day up by 0.43 percent.
The Dow hit a record close on Wednesday on healthcare and consumer gains, while the S&P 500 and Nasdaq were flat as investors paused the AI rally and watched Middle East peace talks.
Dow Jones closed up by 0.36 percent, S&P 500 closed up by 0.02 percent, Nasdaq settled up by 0.07 percent.
Commodities Recap
Gold prices slipped to a two-month low on Wednesday as expectations of tighter monetary policy to curb inflation weighed on sentiment, amid ongoing uncertainty over the U.S.-backed war with Iran.
Spot gold was down 1.3% at $4,447.71 per ounce as of 2:08 p.m. EDT (1808 GMT), after falling to its lowest level since March 27 earlier in the session. U.S. gold futures for June delivery settled 1.2% lower at $4,448.40.
Oil prices fell 5% to their lowest level in over a month on Wednesday as investors awaited updates on a framework of a U.S.-Iran deal to end their conflict and reopen the Strait of Hormuz.
Brent crude futures settled down $5.29, or 5.31%, at $94.29 a barrel, while U.S. West Texas Intermediate crude lost $5.21, or 5.55%, to $88.68.
