Fed Minutes & A Slew of economic data from U.K. will drag volatility

Dollar continues to remain on its bullish track it hit a two-month high against a basket of currencies yesterday. The greenback sparked to the high amid a lack of progress in talks over increasing the U.S. debt limit.

As the deadline to increase the government’s $31.4 trillion borrowing limit or risk default drew nearer, representatives of President Joe Biden and congressional Republicans finished another session of debt ceiling negotiations on Tuesday with no signs of progress.

Meanwhile, the potential of additional rate rises was raised by better-than-anticipated economic data and hawkish remarks from regional Fed presidents like James Bullard and Neel Kashkari, which also boosted the value of the dollar.

The economic data also revealed that in April, sales of brand-new single-family houses in the United States surged to a 13-month high. The manufacturing and services sector-tracking U.S. Composite PMI Output Index increased to a level of 54.5 this month. That level was the highest since April 2022, and it came after an April final reading of 53.4.

Dollar index settled at 103.515, up by 0.27%, while USDINR settled at 82.8100, almost unchanged.

After hitting a day’s lows, bullion prices were able to recover slightly. Gold prices settled at 60197, down 0.07%. Prices made a low 59739. Silver bounced from the low of 71109 and settled at 72164, down by 0.78%.

Base metals plunged significantly yesterday after preliminary manufacturing PMI readings from the U.S., Euro Zone and the UK contracted more than expected in May.

The findings showed that global industrial activity has been consistently slowing this year, which is anticipated to have a considerable negative impact on copper demand.

As traders anticipated that the Federal Reserve will keep interest rates higher for longer this year, the rebound of the U.S. dollar put pressure on broader metal markets as well.

Copper settled at 712.60, down by 0.67%. Prices plunged near to their five-month low. Zinc fell by 2.92% and settled at 214.75, the lowest level since April 2021. Aluminium prices are down by 0.10% at 208.80.

Crude Oil prices continued their recovery rally, prices jumped to the day’s high after U.S. oil and fuel supplies tightened and as a warning from the Saudi energy minister to speculators raised the prospect of further OPEC+ output cuts.

Brent crude futures were up by 2.6% to $77.46 a barrel. U.S. West Texas Intermediate crude was at $73.72 a barrel, up 2.25%. MCX crude oil was up by 1.25% and settled at 6092, the highest level after 10 May 2023.

Economic data and events to watch


At 12.45 am- the market may react strongly to CPI y/y. Data is foreseen at 8.2%, lower than the 10.1% previous reading.

Core CPI y/y, data is foreseen at 6.2%, unchanged from the previous 54.6.

At 2.00 pm – HPI y/y is to be released. Data is expected to reduce by 5.2% from 5.5%.

At 3.00 pm and 6.30 pm – BOE Gov Bailey Speaks will have a strong impact on the pound.

At 3.30 pm – CBI Industrial Order Expectations to be released. Data is foreseen contraction by -19 against the previous contraction of -20.00

All the above data may have a volatile impact on the Pound.


At 1.30 pm – German ifo Business Climate to be released. Data is foreseen at 93.00 slightly lower from the previous 93.6.

The above data is expected to have a negative impact on the Euro.


At 11.30 pm- The entire market will react to FOMC Meeting Minutes.

At 8.00pmm – Crude Oil Inventories