The US Dollar has been strongest against the British Pound this week, with a 0.76% gain. It also showed moderate gains against the Euro (0.22%), Japanese Yen (0.29%), and Swiss Franc (0.61%). The Australian and New Zealand Dollars weakened slightly versus the USD.
The Federal Reserve is expected to keep interest rates steady in the 4.25%-4.5% range. However, updated forecasts on interest rates, inflation, and growth in the SEP could influence market reactions.
Fed Chair Jerome Powell will present the policy statement and answer questions later in the session.
In the UK, inflation slowed slightly in May, with the Consumer Price Index (CPI) rising 3.4% year-over-year, down from 3.5% in April. Monthly CPI increased by 0.2%.
The British Pound showed little immediate reaction, trading just above 1.3450 against the USD. The Bank of England’s interest rate decision is due Thursday.
The Euro rebounded after Tuesday’s losses, holding above 1.1500 against the USD. European Central Bank officials are scheduled to speak later.
Gold prices remained steady on Tuesday, closing near $3,380 per ounce after failing to surpass $3,400. Oil prices climbed sharply Tuesday afternoon, with West Texas Intermediate crude settling above $73.50 per barrel—the highest since January. Early Wednesday, oil prices eased slightly below $73.
Data from Japan showed a 9.1% monthly drop in machine orders for April. After recent gains, USD/JPY slipped to around 145.00 in European trading on Wednesday.
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