Investors remain cautious on Wednesday as the US inflation data nears amid an unresolved debt ceiling crisis which was postponed to Friday. A lower inflation read may support the Fed’s idea of a rate pauses in the meantime.
USDCAD traded flat at +0.05% as the focus shifted to the US CPI data release due later today. The debt ceiling issue remained unsolved after Joe Biden and other top officials failed to agree on the way forward and scheduled another meet-up for Friday. The crisis had little effect on the greenback on Wednesday as traders awaited inflation figures from the US.
The Canadian dollar failed to capitalize on the buck’s weakness as falling crude oil prices weighed ahead of Canada’s building permits data. To the upside, bulls may seek 1.3500 and 1.3530 while sellers on the other hand may dip to 1.3300.
EURCHF seesawed below the 0.9700 level trading at -0.01% with minimal volatility as traders await key data from the US. In early European trade, the German CPI data met expectations of 7.2% in the year ending April while the month-on-month read came at 0.4% as anticipated.
The inflation was less than the previous print which weighed on the Euro along with a cautious mood in the session. Later in the day, the Swiss National Bank Chairman Thomas Jordan will be speaking. An extended dip may give up 0.9700, a 7-month low.
GBPZAR rallied by +0.71% as the Bank of England rate decision nears. The sterling strengthened on the possibility of a hawkish BoE although expectations are currently at a 25-basis point hike.
On Thursday, the manufacturing sector in South Africa is set to report the health of the sector. The reading is anticipated to be less than the previous which may weigh on the ZAR. The pair rose after establishing a low at 23.50 and hit a cap at 23.80. Further up bulls may revisit 24.00.
European stocks were quite subdued as markets await a new catalyst from the US. The UK100 was down -0.06% trading between 7740 and 7780. France 40 lost -0.20% ranging below 7400 as the 7300 low remains in focus. DAX in Germany shrank by -0.20% as bears face a challenge at 15 880 for an extended dip.
US stock futures traded lower, extending yesterday’s downside ahead of inflation data from the US. The US500 futures lost -0.14% as bulls may reclaim 4050. US30 futures declined by -0.19% with room for sellers to revisit 33 000. US100 futures were flat at -0.02% sliding towards the 12950 low.
Crude oil prices fell on Wednesday ahead of the crude oil inventories data from the US. The Energy Information Administration will report stockpiles in the world’s biggest oil consumer which are expected to rise to -0.917 million against -1.280 million. Brent was down -0.79% after a rejection at $77.50 as $76.00 is a key support area on the slide. US WTI sank -0.80% with $72.00 in focus.