Investors are adopting a cautious stance mid-week while navigating through the latest headlines surrounding the US trade policy. Later in the American session, the Federal Reserve will publish the minutes of the June policy meeting and the US Treasury will hold a 10-year note auction.
On Tuesday, US Commerce Secretary Howard Lutnick noted that another 15 to 20 tariff letters are expected to be announced in the next two days.
Meanwhile, President Donald Trump said that the BRICS members will be subject to 10% tariff rate and added that they will be introducing tariffs on pharmaceuticals and semiconductors soon.
He noted that there is likely to be a 50% tariff on copper. Lutnick explained that copper tariffs will likely be put in place toward the end of July or in August.
After posting small gains on Tuesday, the DXY Dollar Index holds steady at around 97.50 in European trading on Wednesday. In the meantime, US stock index futures trade flat after Wall Street’s main indexes closed mixed on Tuesday.
The Reserve Bank of New Zealand (RBNZ) announced that it left the policy rate unchanged at 3.25%, as widely expected.
“If medium-term inflation pressures continue to ease as projected, the Committee expects to lower the official cash rate further,” the RBNZ said in its policy statement on Wednesday. NZDUSD showed no immediate reaction to the RBNZ policy decision and was last seen trading flat at around 0.6000.
Following a drop in the Asian session, AUDUSD regained its traction and turned positive on the day near 0.6550. Data from China showed earlier in the day that the Consumer Price Index (CPI) declined by 0.1% on a monthly basis in June.
After posting marginal gains on Tuesday, EURUSD struggles to gather directional momentum early Wednesday and moves sideways slightly above 1.1700. Several European Central Bank policymakers are scheduled to deliver speeches later in the day.
GBPUSD stabilised at around 1.3600 early Wednesday after touching a two-week low below 1.3530 on Tuesday.
Gold came under heavy bearish pressure in the second half of the day on Tuesday and lost about 1%. XAUUSD remains on the back foot and trades near $3,290.
(Source: OANDA)
