Forex Today: Major currency pairs stay in familiar ranges, eyes on German inflation

Here is what you need to know on Wednesday, May 29:

Major currency pairs are having a difficult time finding direction in the first half of the week. Following Tuesday's modest rebound, the US Dollar (USD) Index hold steady slightly above 104.50. Later in the day, Consumer Price Index (CPI) data from Germany will be watched closely by market participants. During the American trading hours, the Federal Reserve (Fed) will release its Beige Book.

The upbeat consumer sentiment data from the US, combined with a nearly 2% increase seen in the 10-year US Treasury bond yield, helped the USD stay resilient against its rivals on Tuesday. Early Wednesday, the 10-year US yield holds steady above 4.5%. Meanwhile, US stock index futures trade in negative territory after Wall Street's main indexes registered small gains on Tuesday.

During the Asian session, the data from Australia showed that the CPI rose 3.6% on a monthly basis in April. This reading followed the 3.5% increase recorded in March and came in above the market expectation of 3.4%. Other data from Australia showed that the ANZ Business Confidence Index declined to 11.2 in May from 14.9. AUD/USD edged slightly higher following the data releases and was last seen trading above 0.6650.

Australian Dollar consolidates after robust Monthly inflation, US Dollar remains firm.

Bank of Japan (BoJ) board member Seiji Adachi said early Wednesday that they are not yet at a stage where they are convinced there is a sustained achievement of price target, adding that they must maintain accommodative conditions. USD/JPY showed no reaction to these remarks and was last seen trading sideways at around 157.00.

Japanese Yen recovers early losses after BoJ Adachi favors to reduce bond-buying.

After rising toward 1.0900 during the European trading hours, EUR/USD lost its traction and declined toward 1.0850, closing virtually unchanged on Tuesday. The pair stays relatively quiet early Wednesday near Tuesday's closing level.

GBP/USD touched its highest level in over a month above 1.2800 on Tuesday but erased its gains to end the day flat above 1.2750. The pair trades marginally higher on the day at around 1.2770 in the European morning.

Gold posted gains for the third consecutive day on Tuesday. Nevertheless, the recovery seen in the US yields capped XAU/USD's upside and caused it to retreat toward $2,350.