FINWIRES · TerminalLIVE
FINWIRES

US Dollar Rises Early Wednesday Ahead of FOMC Meeting

By

The US dollar rose against its major trading partners early Wednesday, except for a decline versus the yen, ahead of the Federal Open Market Committee's meeting statement at 2:00 pm ET.

The CME's FedWatch Tool sees a 99.6% change of no change to the current target range of 3.50% to 3.75%, so the focus will be on an updated set of forecasts in the Summary of Economic Projections and any comments from new Federal Reserve Chairman Kevin Warsh.

Earlier in the day, retail sales data for May are due to be released at 8:30 am ET, followed by pending home sales data for May at 10:00 am ET, and business inventories data for April at 10:30 am ET.

Weekly petroleum stocks data are due to be released at 10:30 am ET, and the Atlanta Federal Reserve is due to update its GDP nowcast estimate for Q2 around midday.

Earlier Wednesday, the Mortgage Bankers Association reported that mortgage applications declined in the week ended June 12 after a large increase in the previous week. The average 30-year mortgage rate was unchanged.

A quick summary of foreign exchange activity heading into Wednesday:

EUR/USD fell to 1.1597 from 1.1608 at the Tuesday US close and 1.1612 at the same time Tuesday morning. Eurozone consumer price growth slowed in May compared with the previous month, but the year-over-year rates accelerated, according to data released earlier Wednesday. The next European Central Bank meeting is scheduled for July 23.

GBP/USD fell to 1.3413 from 1.3424 at the Tuesday US close and 1.3431 at the same time Tuesday morning. UK consumer prices rose less than expected in May, keeping the year-over-year rate in line with the previous month, according to data released earlier Wednesday. The next Bank of England meeting is scheduled for Thursday, when no change in the policy rate is expected.

USD/JPY fell to 160.2890 from 160.4737 at the Tuesday US close and 160.3294 at the same time Tuesday morning. The Japanese trade balance was in deficit in May after a surplus in April, according to data released overnight. The next Bank of Japan meeting is scheduled for July 30-31.

USD/CAD rose to 1.4013 from 1.3999 at the Tuesday US close and 1.3998 at the same time Tuesday morning. Canadian new home price data for May are due to be released at 8:30 am ET. The next Bank of Canada meeting is scheduled for July 15.

Related Articles

International

Australia Must Prepare for More Shock-Prone Financial System Amid Strained Geopolitical Climate, Central Bank Assistant Governor Jones Says

Australia must be ready to manage a financial system that is more prone to shocks, as the currently strained geopolitical environment carries broad implications ranging from the resilience of key payments infrastructure to the fragmentation of cross-border capital flows, Reserve Bank of Australia Assistant Governor Brad Jones said in a Wednesday speech.Speaking at an Australian Banking Association conference in Melbourne, Jones said some of the most consequential developments in the global financial system's modern history were the result of geopolitical unrest.Geopolitical shocks have a long history of hampering bond and stock markets by disrupting supply chains, and the associated risk has long been part of contingency planning for the payment system, which is "an issue of particular relevance today," Jones said.At the same time, the financial system also has a record of shaping geopolitical developments, he said, pointing to the role of the British bond market in halting Napoleon's march across Europe early in the 19th century.As challenges to international cohesion have resurfaced, financial and economic linkages are again being reshaped by strategic considerations, with some indicators suggesting that a fracturing is underway "on a scale and with a speed unseen in eight decades," the central bank official said."All of this brings us to the old aphorism - we must take the world as it is, not as we wish it to be," Jones said. "It is in this context that policy makers are dialing up efforts to ensure the financial system can weather a more challenging risk environment."While the composition of international asset exposures for Australian banks is somewhat less troublesome than in other countries, the high foreign ownership share of the country's fixed-income markets means "the Australian financial system will not be immune from shocks abroad," Jones said.

ASX 200
International

Australia's Leading Index Inches Up in May, Remains Weak

The six-month annualized growth rate in the Westpac-Melbourne Institute Leading Index inched up slightly to negative 0.17% in May from negative 0.18% in April, but remains weak, Westpac said in a report on Tuesday.The index indicates the expected pace of economic activity compared with trend levels three to nine months into the future.The Australian economy is experiencing a noticeable loss of momentum, as indicated by the March quarter national accounts showing a softening in activity, apart from increased investment in data centers.The May index suggests that the subdued growth will likely persist into the latter half of the year and into early 2027.

ASX 200
International

Singapore's Trade Surplus Narrows to SG$5.57 Billion in May

Singapore's merchandise trade surplus contracted to SG$5.57 billion in May from SG$13.1 billion in the prior month, according to data from Enterprise Singapore released on Wednesday.The latest figure, however, beat Trading Economics' forecast of SG$7 billion in surplus.Total merchandise exports increased 39.7% year over year, faster than the 33.0% growth recorded in the previous month.Meanwhile, total merchandise imports rose 43.6% year over year, compared with a 34.5% growth in the preceding month.

^STI