US Dollar Drops against Trading Majors in FX Markets
The US dollar fell against its major trading partners early Wednesday, except for a gain versus the Canadian dollar, ahead of a busy morning of data releases and the Federal Open Market Committee’s statement at the conclusion of its two-day interest rate policy setting meeting in the afternoon.
Housing starts data for April and weekly jobless claims data, released a day early due to the US Juneteenth holiday Thursday, are due to be published. Weekly petroleum stocks inventory data are set to be released at 10:30 am ET and weekly natural gas stocks data are due today. The Atlanta Fed is expected to update its gross domestic product nowcast estimate for Q2 around midday.
The FOMC’s statement is scheduled to be released, followed by Fed Chairman Jerome Powell’s press conference at noon. There is a 99.9% chance of no change in rates being priced in, according to the CME’s FedWatch Tool.
Earlier Wednesday, the Mortgage Bankers Association said mortgage applications declined in the week ended June 13 despite lower mortgage rates due to continued uncertainty.
A quick summary of foreign exchange activity heading into Wednesday showed that USDEUR rose to 1.1497 from 1.1485 at the Tuesday US close but was below a reading of 1.1568 at the same time Tuesday morning.
Eurozone consumer prices were flat in May, slowing the year-over-year pace, while the current account surplus narrowed in the same month, according to data released earlier Wednesday.
European Central Bank policy board member Philip Lane is due to speak at 11:00 am followed by ECB Vice President Luis de Guindos at 2:00 pm ET. The next European Central Bank meeting is scheduled for July 24.
GBPUSD rose to 1.3449 from 1.3428 at the Tuesday US close but was well below a level of 1.3566 at the same time Tuesday morning.
UK consumer prices rose as expected in May, but the year-over-year rate slowed from the previous month, data released earlier Wednesday showed. The next Bank of England meeting is scheduled for Thursday when no change in interest rates is expected.
USDJPY fell to 144.8620 from 145.2280 at the Tuesday US close but above a level of 144.6459 at the same time Tuesday morning. The Japanese trade deficit widened significantly in May compared with a month earlier while Japanese business conditions remained positive in June, according to data released overnight. The next Bank of Japan meeting is scheduled for July 30-31.
USDCAD rose to 1.3665 from 1.3646 at the Tuesday US close and 1.3559 at the same time Tuesday morning. There are no Canadian data on Wednesday’s schedule, but Bank of Canada Governor Tiff Macklem is due to speak at 11:15 am ET. The next Bank of Canada meeting is scheduled for July 30. Naira Sees Weekly Gain Amidst Zero FX Intervention
