Market Drivers – US Session – Tuesday, June 21

US Fed Chair Jerome Powell will testify before Congress. Powell’s awaited remarks will be out ahead of the event. Market players will be looking for hints on future quantitative tightening.

Economic Data
The UK will release updates on inflation data on Wednesday.

Other Developments

Central bankers keep hinting at aggressive measures. Bank of England Chief Economist Huw Pill said they would certainly be ready to act if they see evidence of persistent price pressures. Reserve Bank of Australia Governor Philip Lowe opened the door for a 50 bps rate hike in July. Finally, European Central Bank Governing Council member Olli Rehn said it is very likely that the September rate hike would be bigger than the 25 bps planned for July.

Gold is striving with the $1,830 level under pressure. Crude oil prices saw little change on Tuesday, with WTI now trading at around $109.50 a barrel.

The yen’s collapse is mostly due to the Bank of Japan’s stubborn commitment to its ultra-loose monetary policy.

The US dollar edged lower against most major rivals on Tuesday amid an improved market sentiment. The USD/JPY pair, however, soared to a fresh multi-year high of 136.61, holding nearby at the end of the US trading session.

On the equities’ front; global indexes edged higher, with Wall Street posting substantial gains and limiting demand for safety. US government bond yields ticked higher, but not enough to revive inflation-related concerns.

The EUR/USD pair trades around 1.0530, little changed on a daily basis. GBP/USD posted a modest advance and now trades around 1.2280. The better tone of equities helped commodity-linked currencies to advance against their US rival. AUD/USD is up to 0.6970, while USD/CAD trades in the 1.2910 price zone.

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