- The US Dollar gains against major peers as investors take profits from last week’s greenback shorts in a week that has little to offer in the terms of key economic data. Investors are now focusing on the US’ interest rate differential relative to the rest of the world.
- Federal Reserve’s Loretta Mester stated that policy is restrictive, but policymakers need to wait for more evidence on the path of inflation to safely adjust interest rates. Mester favoured three rate cuts this year and now thinks three reductions would still be appropriate in 2024.
- The US Dollar Index trades at 104.60, up 0.04% on the day and US Treasury 10-year yields are steady at 4.45% as risk-off sentiment builds up.
- AUD/USD declines for a second consecutive day trading at 0.6658 after RBA policy makers have put tightening on the table again on the May meeting minutes, while NZD/USD hovers the 0.61 level.
- EUR/USD is steady at 1.0860, consolidating last week’s gains while GBP/USD holds above 1.27.
- EUR/GBP is biased lower into the UK’s inflation print tomorrow as traders lean into option strikes set below the current spot rate.
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