Forex Today: No progress ahead of FOMC Minutes

What you need to take care of on  Wednesday, May 22:

Financial markets made no progress on Tuesday, with major pairs holding on to familiar levels and within tight ranges. The US Dollar saw a modest uptick amid a risk-averse environment, with Asian and European indexes closing in the red. Wall Street, however, managed to post modest gains ahead of the release of earnings reports after the close.

The EUR/USD pair held at around 1.0850, unaffected by minor European macroeconomic figures that were generally encouraging.

GBP/USD remained stuck to the 1.2700 price zone, although the United Kingdom (UK) will publish the Consumer Price Index (PPI) and other inflation-related figures on Wednesday, which may bring the pair back to life.

The Canadian Dollar edged sharply lower, sending USD/CAD to 1.3674 after Canadian inflation figures. The Consumer Price Index (CPI), declined to 2.7% on a yearly basis in April from 2.9% in March,  while the Bank of Canada's core Consumer Price Index increased 1.6% on a yearly basis, down from the 2% growth recorded in March.

AUD/USD held around 0.6660 despite Australia's May Westpac Consumer Confidence, which improved to -0.3% from -2.4% in April. Additionally, the Reserve Bank of Australia (RBA) released the Minutes of its May monetary policy meeting, which maintained the overall hawkish stance adopted in the previous meeting.

The Fed  Board issued its Economic Well-Being of US Households in 2023 report, which examines the financial circumstances of US adults and their families. The document showed that overall, “financial well-being was nearly unchanged from 2022 as higher prices remained a challenge for most households and workers continued to benefit from a strong labor market.” The news is quite discouraging, moreover after inflation picked up in the first quarter of the year, further diluting the odds for multiple rate cuts throughout the rest of the year.

Looking ahead, the Reserve Bank of New Zealand will announce its decision on monetary policy early on Wednesday and could introduce some noise in commodity-linked currencies.

Also, the United States (US) Federal Open Market Committee (FOMC) will release the Minutes of its latest meeting on Wednesday. Market players hope for clarity over the timing of a monetary policy pivot, which policymakers have refused to provide so far.