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Reports have it that the US President and Kevin McCarthy are to close the debt ceiling deal for two years on an agreement they would raise the limit and cap another spending. UK Retail sales beat expectations after rising in May while the story remained quite different for the Australian economy.
USDCHF reversed 4-day gains by -0.34% ahead of the US PCE data later in the day. The dollar faced pressure as risk sentiment got boosted by a possibility of a debt ceiling deal ahead of the long weekend in the US.
However, the downside for the USD may be limited by Fed rate hike expectations amid unceasing price pressures in the US. The US PCE data will be accompanied by Core Durable Goods Orders and the Michigan consumer Confidence. The pair tanked towards 0.9000 from an intraday high of 0.9060.
EURGBP traded -0.30% following pleasing retail sales data from the UK. The UK Office for National Statistics showed that consumer spending had improved in April after retail sales rose to 0.5% from a previous print of -1.2% on a month-on-month basis although the yearly reading was a little changed to the upside. The euro had a bare calendar day ahead of the preliminary CPI data next week. The pair`s sellers took over from a 3-day high at 0.8710 sliding towards 0.8650.
USDJPY rallied by +0.29% as the Japanese yen lost its safe-haven appeal amid a risk appetite rebound. Headline inflation in Japan eased more than expected in May to 3.2% weighing on the local currency. The Australian dollar held gains despite disappointing retail sales data at 0.0% against a survey of 0.3% and a previous read of 0.4%. The upside may, however, be cushioned by the tilt in consumer spending. Buyers soared from 90.80, targeting 91.50. A number above may give 91.70 and 92.00.
European stocks rebounded from multi-week lows on improved UK data and tech advances. FTSE100 rose by +0.10% as bulls held above the 7550 low and upside gains could target the 7700 level. CAC40 advanced by +0.46% towards the 7300 resistance. A Break above that level could extend further rally cover the 7310 and 7380 range gap. DAX added +0.11% as 15800 holds as near-term support and upside gains are capped at the 16000 level.
US stock futures rallied ahead of US inflation data. US500 futures were up +0.28% reclaiming the 4150 near-term barrier and the next key target is at the 4200 level. US100 futures soared by +0.37% as bulls flirt with the 14000 level and a break above that level. 14250 will be the next critical barrier. US30 futures added +0.24% and critical levels to watch out for are 33000 resistance and 32700 support.
Gold prices rose on the back of a retreating dollar as sentiment took the upside on possibilities of a closed debt limit deal. XAUUSD was up +0.63% trading back in the $1950 zone after tanking to $1936. Buyers may need to move further above otherwise another fall to $1920-$1900 may be seen.
