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The U.S. dollar was steady early on Monday after suffering huge losses against its main rival last week. U.S. stock and bond markets will be closed for Juneteenth. The European economic calendar will not feature any high-impact data releases, and market participants will be closely watching for comments from central bankers.
The US dollar index (DXY) fell more than 1%, closing in negative territory for the third consecutive week, before entering a consolidation phase above 102.00 during the European session. The yield on the benchmark 10-year U.S. Treasury note has fluctuated wildly following the Federal Reserve’s (FED) monetary policy announcement, but ended last week little changed below 3.8%.
On Sunday, U.S. Secretary of State Anthony Blinken and Chinese Foreign Minister Qin Gang reportedly held “candid and constructive talks” on differences between the two sides, ranging from Taiwan to trade. According to Reuters, the two sides are said to have reached little agreement other than to maintain dialogue and eventually meet in Washington.
EUR/USD gained nearly 200 pips last week, buoyed by broad dollar weakness and hawkish comments from the European Central Bank (ECB). ECB Chief Economist Philip Lane and Governing Council member Isabelle Schnabel are due to speak later in the day. At press time, the pair was seen consolidating last week’s gains below 1.0950.
GBP/USD surged last week to 1.2850, its highest level since April 2022. The pair remained relatively calm early on Monday, bouncing up and down in a tight range just above 1.2800. On Tuesday, the Office for National Statistics will publish inflation data for May ahead of the Bank of England (BoE) monetary policy announcement on Thursday.
USD/JPY recorded its highest weekly close since November as it failed to benefit from the greenback’s dismal performance. Resilience in U.S. Treasury yields and a dovish tone from the Bank of Japan (BoJ) helped the pair gain traction in the second half of the week. USD/JPY was last seen moving sideways above 141.50.
Gold prices ended the previous week little changed at just above $1,950. XAU/USD struggled to find direction early on Monday.
AUD/USD trades lower but holds above 0.6850 during the European morning. The People’s Bank of China (PBoC) is expected to announce a rate cut early on Tuesday.
USD/CAD fell below 1.3180 on Friday, hitting its lowest level since September. The pair clings to gains from a modest recovery around 1.3200 on Monday.
Bitcoin traded within a narrow channel over the weekend, extending its sideways action above $26,000 early Monday. Ethereum recovered from a three-month low of $1,620 hit midweek last week and stabilized above $1,700.
