Market Drivers; US Session, June 27

USD Retreats on Eve of PCE Data

The US Dollar Index (DXY) pared back gains from its recent surge above 106.00, as cautious investors awaited the release of crucial US inflation data (PCE). The PCE figures, due on June 28th, will be the main focus, along with Personal Income, Spending, the Chicago PMI, and the final University of Michigan Consumer Sentiment reading. Additionally, speeches from Fed officials Barkin and Bowman are on the docket.

Currencies

EUR/USD clawed back some lost ground, climbing back above the 1.0700 level after a two-day decline. German data will be key on June 28th, with Retail Sales and the June labor market report in focus.

GBP/USD rebounded from Wednesday’s sharp decline amid a modest improvement in risk appetite. The UK’s final Q1 GDP growth rate takes center stage on June 28th.

USD/JPY remained near multi-decade highs around 160.80, with caution lingering regarding potential Bank of Japan intervention. Japan’s June 28th economic calendar features the Unemployment Rate, Tokyo inflation figures, flash Industrial Production data, and Housing Starts.

AUD/USD remained stuck in its multi-week consolidation pattern, hovering around the 0.6650 region. Australian Housing Credit figures are due on June 28th.

Commodities

Gold prices rebounded significantly after two consecutive down days, reclaiming the $2,330 per ounce level ahead of the key US PCE data release. Silver prices edged modestly higher, snapping a four-day losing streak.

Oil prices rallied to fresh two-month highs above $82.00 per barrel, as renewed geopolitical tensions countered demand concerns.

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