Topic: Trade Bitcoin with FreshForex - page 8. (Read 4365 times)

The rise in USD/JPY raises expectations of currency intervention by the Japanese authorities. "Currently, USD/JPY will be guided by UST yields and the US dollar. For USD/JPY to reverse downward, it will require the US Dollar to turn around/Fed Fed to cut rates or the BoJ to signal an intention to normalize urgently (rate hike or increased pace of balance sheet reduction). None of the above seems likely to happen," according to OCBC strategists Francis Cheung and Christopher Wong.

Following the June 11-12 Federal Open Market Committee (FOMC) meeting, Federal Reserve (Fed) officials emphasized that the approach depends on data and refrained from cutting interest rates until further observations. Some Fed officials were unsure whether they needed to cut interest rates, while several policymakers said they would need to raise rates again if inflation rebounds.

However, the dollar's gains may be limited as recent US PCE inflation data and a weaker-than-expected services PMI have fueled expectations of a Fed interest rate cut this year. Later in the day, traders will focus on the US employment data for June. The US NFP is projected to show an increase of 190K jobs in June, while the unemployment rate is expected to remain unchanged at 4%. Finally, average hourly earnings will fall to 3.9% y/y in June from 4.1% in May.

Trading recommendation: Trade mainly with buy orders at the price level of 160.85. Consider sell orders at the price level of 160.10.

The pound/dollar exchange rate continued its short-term recovery on Wednesday, with a general softening of US economic data in the mid-week market session providing support. The upcoming UK election on Thursday will attract a great deal of attention from traders, while US markets will be focused on the anticipation of a day off on Thursday.

The US employment change from ADP fell to 150k in June, down from the previous month's 157k and below the projected increase to 160k. A closer examination of the ADP report revealed that many of the jobs that had already been lost were concentrated in the low-paying leisure and hospitality sectors.

The number of individuals filing initial jobless claims in the United States for the week ending 28 June increased to 238,000 from 233,000 the previous week, exceeding the projected figure of 235,000. The four-week average of initial jobless claims also rose to 238,500 from 236,250.

The US ISM Services Purchasing Managers' Index (PMI) declined sharply in June, reaching its lowest level since June 2020. The services PMI fell from the previous month to 53.8, exceeding forecasts for a decline to 52.5.

On Thursday, US markets will be closed due to US Independence Day celebrations, while parliamentary elections will begin in the UK. The Labour Party in the UK is expected to secure a majority in government, marking the end of the Conservatives' 14-year rule. According to the latest mega poll released on Wednesday, Labour is expected to be well ahead of the Conservatives, with Keir Starmer, the Labour Party's candidate, expected to replace Rishi Sunak, the current Conservative Prime Minister. A poll conducted by YouGov indicates that Labour is projected to win 431 seats, while the Tories are expected to win just 102 seats.

The Euro-dollar pair spent Tuesday in fluctuations, looping just below 1.0750 as the pair struggles to find momentum. Key US employment data is released on Friday, while EU economic data remains patchy during the second half of the trading week.

Core HCOB Harmonized Index of Consumer Prices (HICP) inflation came in at 2.9% m/m in June, holding steady with the previous reading and defying the forecast for a decline to 2.8%. Overall, HICP inflation fell to 2.5% y/y as forecast, down from the previous reading of 2.6%, but European inflation remains well above the European Central Bank's (ECB) target range of 2%.

The EU Composite PMI for June is expected to remain at 50.8 and the annualized European Producer Price Index for May is expected to improve, albeit marginally, to -4.1% y/y from the previous reading of -5.7%.

The US ADP employment change for June is expected to rise slightly to 160k from the previous value of 152k. Meanwhile, the ISM Services PMI is expected to decline further to 52.5 m/m from the previous value of 53.8.

On Monday, EURUSD hit a new high since mid-June above 1.0770 before being forced back down due to a reversal in investor sentiment in the broad market. The bullish momentum was interrupted after US business activity data showed warning signs of a deepening economic slowdown. Throughout the week, investors will be anxiously awaiting key economic indicators on both sides of the Atlantic, culminating in fresh US Non-Farm Payrolls (NFP) data scheduled for Friday.

German consumer price index (CPI) data on Monday generally failed to meet expectations, with the annualized German CPI in June falling to 2.2% from the previous reading of 2.4% and retreating from the forecast of 2.3%. Data from the US on Monday also fell short of expectations: the ISM manufacturing Purchasing Managers' Index (PMI) declined to 48.5 in June from 48.7 and fell short of the forecasted increase to 49.1. The ISM Manufacturing Goods and Services Price Index also declined sharply in June, falling to 5..1 from the previous reading of 57.0, further exceeding the forecasted decline to 55.9.

U.S. markets were suddenly rattled by renewed concerns about the upcoming presidential election in November. Recent public debates have left many questions about who will be the clear frontrunner, and on Monday the U.S. Supreme Court ruled that courts have limited ability to bring criminal charges against sitting presidents.

On Tuesday, markets will be hit with a fresh batch of key European data as well as a number of speeches from European Central Bank (ECB) executives, including another speech from ECB President Christine Lagarde. The pan-European Harmonized Index of Consumer Prices (HICP) is expected to fall slightly, with EU core HICP inflation falling to 2.8% y/y from a previous reading of 2.9%. Producer Price Index (PPI) inflation data in Europe is due out on Wednesday, followed by EU retail sales data early Friday.

In the US, investors will await Federal Reserve Chairman Jerome Powell's speech on Tuesday, followed by ADP employment change data on Wednesday and the latest US Non-Farm Payrolls (NFP) and Average Hourly Earnings for June on Friday.

Trading recommendation: Trade mainly with buy orders at the price level of 1.0760. We consider sell orders at the price level of 1.0695.

The USD/JPY pair commenced the new week on a subdued note and consolidated its recent strong rise to its highest level since December 1986, reached on Friday. Spot prices are currently trading with a slight positive bias around the 161.00 mark, although the upside seems limited amid speculation of an imminent intervention by the Japanese authorities to support the currency.

In fact, Japan's Finance Minister Shunichi Suzuki stated at a press conference on Friday that excessive volatility in the currency market is undesirable and that the authorities will respond appropriately to such moves. Meanwhile, Japan appointed Atsushi Mimura as the new chief diplomat for foreign exchange issues on Friday. However, the move did not bring relief to the Japanese Yen (JPY) as investors are unsure of Atsushi's stance on monetary policy. This, along with the significant interest rate differential between the US and Japan, is likely to continue to provide a supportive environment for the USD/JPY pair.

The Bank of Japan (BoJ) has not yet indicated the timing of the next rate hike. In contrast, the Federal Reserve (Fed) has been more proactive following its June meeting, forecasting only one interest rate cut in 2024. Furthermore, the likelihood of a Trump presidency is increasing concerns about the imposition of punitive tariffs, which could result in inflation and higher interest rates. This, in turn, lifts US Treasury yields to multi-week highs and continues to support the US dollar, lending further support to the USD/JPY pair and reaffirming the positive outlook.

Meanwhile, markets continue to assess the likelihood of a September Fed rate cut, given signs of weakening inflation. The US Personal Consumption Expenditure (PCE) price index provided further confirmation of the disinflationary trend observed in the Consumer Price Index (CPI) and Producer Price Index (PPI) for May. This may dissuade those who are bullish on the dollar from making aggressive bets, and may limit the upside for the USD/JPY pair. Market participants are now awaiting the release of important US macroeconomic data scheduled for the beginning of the new month. This will include the ISM manufacturing PMI, which is scheduled for release on Monday.

Oil prices have shown steady growth from $76 to $85 per barrel of Brent crude (#BRENT) since the beginning of June. This rise is driven by seasonal factors: high consumer activity during the summer driving season, increased demand from the transportation sector, and higher electricity consumption for air conditioning.

However, a more significant development in the oil market is the expiration of the 50-year-old Security Agreement between Saudi Arabia and the USA, signed in 1974, and Riyadh's refusal to renew it.

The agreement facilitated economic cooperation and military needs between the two nations, stabilizing the situation after the crises of the 1970s. The US benefited from oil at favorable prices, while Saudi Arabia gained a technological ally and wealth. Crucially, this agreement mandated that Saudi Arabia sell its oil exclusively for dollars, a restriction that no longer applies. This system greatly strengthened the dollar's position as the dominant global reserve currency by creating worldwide demand for dollars directly tied to oil transactions. Many have called this the "deal of the century."

Abandoning the petrodollar system could, in the long run, weaken the dollar's influence and impact US financial markets, reducing Washington's ability to accumulate national debt and profit from exports. Countries like China, Russia, Iran, and India are increasingly settling trades in their national currencies. By 2023, already 20% of global oil was being purchased without using the dollar. Now, Saudi Arabia can sell oil for any currencies or assets, including the yuan, gold, and even cryptocurrencies, which could significantly boost the value of these assets over time.

On Thursday, the GBP/USD pair fluctuated in familiar charts between the long-term moving averages, with price movement centred between the 1.2700 and 1.2600 marks. The data from the US was not as strong as anticipated, and market sentiment shifted towards the middle as investors await key US inflation data on Friday.

In advance of the pivotal US inflation data, the US presidential election is anticipated to commence on Friday morning. Investors will be monitoring the statements of all US presidential candidates for any indications of potential policy plans.

Additionally, the UK will release revised gross domestic product (GDP) data for the first quarter during the London market window. The consensus among market analysts is that UK GDP growth will remain in line with the initial 0.6% QoQ reading.

The initial jobless claims in the US for the week ending 21 June were better than expected, with 233k new claims for unemployment benefits compared to the forecast of 236k. This was down slightly from the previous week's 238k. The four-week average of initial jobless claims increased to 236,000, resulting in a new weekly figure that is below the average.

On Thursday, the US gross domestic product (GDP) met expectations, with the first quarter GDP revised slightly to 1.4% from an initial reading of 1.3%. Additionally, core personal consumption expenditures saw a modest increase in the first quarter, reaching 3.7% q/q compared to a projected 3.6%. The upcoming presidential debate, which begins after the market close on Thursday, will attract investors' attention as they look for potential policy clues from the candidates.

On Friday, investors will be monitoring the US PCE Price Index in anticipation of further declines in US inflation, which would facilitate a potential rate cut by the Federal Reserve (Fed). The core PCE price index is forecast to decline from 0.2% to 0.1% m/m in May.

The Euro-dollar pair pulled back to the 1.0680 area on Wednesday after the German GfK Consumer Confidence Index for July unexpectedly declined, while a lack of meaningful data during the U.S. trading session left investors chewing over the Federal Reserve's (Fed) cautious stance this week. Germany's consumer confidence reading for July fell to -21.8, falling short of forecasts for a recovery to -18.9 from the previous month's revised reading of -21.0. Despite a slow and steady recovery in the German GfK consumer confidence survey, Wednesday's downbeat publication knocked the legs out from under an already battered euro.

The change in U.S. new home sales in May recorded a -11.3% month-over-month decline on Wednesday (2.0%), sharply revised from the initial reading of -4.7%. U.S. GDP for the quarter is expected to rise slightly to 1.4% from an initial reading of 1.3%, while May durable goods orders are expected to contract by -0.1% from a revised 0.6% in the prior month. U.S. initial jobless claims for the week ending June 21 are expected to fall slightly to 236k from the previous reading of 238k, but the figure is expected to be above the four-week average of 232.75k.

Market confidence that the Federal Open Market Committee (FOMC) will cut rates on September 18 has declined. The probability of a rate cut of at least a quarter point fell to 60%, down from a peak of just above 70% last week, according to CME's FedWatch tool.

Japan's Deputy Finance Minister Masato Kanda confirmed that the government is ready to take appropriate measures if excessive currency fluctuations have a negative impact on the national economy. However, Kanda's comments had minimal impact on the Japanese Yen (JPY) exchange rate amid the Bank of Japan's reluctance to provide a detailed plan to reduce bond purchases. This is a significant divergence from the hawkish stance of the Federal Reserve (Fed) and suggests that the path of least resistance for the USD/JPY pair lies to the upside.

Amid the Fed's hawkish pause in June, recent comments from policymakers indicated that the central bank is in no hurry to start a rate cut cycle. Fed Chair Michelle Bowman on Tuesday reiterated her view that keeping rates steady for some time is likely to be enough to bring inflation under control. Fed Chair Lisa Cook said lower interest rates would be appropriate "at some point" given the significant progress in inflation and the gradual cooling of the labor market, but did not elaborate on the timing of the easing.

Nevertheless, signs of easing inflationary pressures in the US keep hopes alive for the Fed's first interest rate cut in September. This, in turn, keeps dollar bulls away from aggressive bets and limits the upside potential of the USD/JPY pair. Traders also prefer to stay on the sidelines ahead of the final US GDP data for the first quarter on Thursday, which will be followed by the publication of the Personal Consumption Expenditures (PCE) price index on Friday. The latter indicator will influence the Fed's further decision and will determine the near-term trajectory of the currency pair.

Trading recommendation: Trade mainly with Buy orders from the current price level

The GBP/USD pair demonstrated bullish sentiment on Monday, rising from recent lows to 1.2650 as markets commenced the new trading week with an appetite for risk. The week ahead will see a dearth of key economic data, so those trading in the cable will be keeping an eye on important calendar releases that will not be released until later in the week. The US and UK gross domestic product (GDP) data are scheduled for release at the end of the trading week, followed by the US personal consumption expenditure (PCE) price index data on Friday.

The Tuesday release schedule is limited to averages, so markets will focus on statements from central bank policymakers. The Federal Reserve's few comments on Monday caused a minor jitter in markets, and the same is expected on Tuesday.

On Monday, Federal Reserve Bank of San Francisco President Mary Daly observed that the 2024 inflation figures do not instil much confidence when viewed in aggregate, although recent data offers grounds for optimism. Fed Chair Daley's comments followed those made earlier by Federal Reserve Bank of Chicago President Austan Goolsbee, who expressed optimism about further progress on inflation. He noted that Fed policy remains sufficiently restrictive.

The Euro-dollar pair remains lower for the third consecutive day on Monday, trading around 1.0690-1.0685 in the Asian session, just above the lowest level since early May. The common currency continues to be dragged down by uncertainty over the outcome of the snap election in France, which has fueled fears that the new government will worsen the financial situation in the Eurozone's second-largest economy. In addition, flash PMI indices released on Friday showed that business activity growth in the Eurozone slowed sharply in June. This, as well as some subsequent US Dollar (USD) buying, proved to be key factors putting downward pressure on EUR/USD.

The US Dollar Index (DXY), which tracks the dollar against a basket of currencies, rose to its highest level since May 9 on the back of Friday's PMI data, which showed that US business activity rose to a 26-month high in June. The data confirms the Federal Reserve's (Fed) patient approach, although signs of weakening inflationary pressures have raised the prospect of a rate cut in September. This could deter dollar bulls from aggressive bets and help limit further EUR/USD declines.

Traders may also prefer to wait for Friday's release of US Personal Consumption Expenditures (PCE) price index data to get an indication of how the Fed will cut the rate. This, in turn, will play a key role in influencing US Dollar price action in the near term and will provide meaningful momentum to the EURUSD. Traders are now waiting for the release of German IFO business climate data and speeches of influential FOMC members to take advantage of short-term opportunities in the absence of any significant macroeconomic releases from the US.

The US Dollar (USD) remains resilient early Friday after rising against major rivals on Thursday. Later in the day, S&P Global will release preliminary reports on manufacturing and services PMIs for Germany, the UK, the eurozone and the US for June. Ahead of the weekend, market participants will also keep a close eye on May US existing home sales data and May Canadian retail sales data. EUR/USD returned to familiar technical levels on Thursday, falling towards 1.0700 after a miss in US economic data supported the dollar.

Germany's Producer Price Index (PPI) fell to 0.0% month-on-month in May, down from the previous reading of 0.2% and missing the expected rise to 0.3%. On an annualized basis, the PPI was also below expectations, falling to -2.2% for the year ending in May. While the annualized figure improved from the previous reading of -3.3%, it still fell short of the projected recovery to -2.0%.

The latest US initial jobless claims data came in above expectations: 238,000 people applied for unemployment benefits in the week ended June 14, up from the previous week's revised figure of 243,000. The increase also pushed the four-week average to 242,750 from the previous 227,250.

The Philadelphia Fed's manufacturing sector business activity index for June fell to 1.3 from 4.5, falling short of the expected 5.0. In addition, U.S. housing starts in May fell to 1.277 million new units, down from the forecast of 1.37 million and the previous month's revised figure of 1.352 million.

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The USD and JPY pair is trading above the 158.00 price level during the Asian session today and remains a step away from the highest level since late April reached last week. Nevertheless, the mixed fundamental backdrop calls for some caution before positioning for a continuation of the recent gains seen over the past two weeks.

The Japanese Yen (JPY) is weakened by the Bank of Japan's (BoJ) decision to refrain from discussing the reduction of JGB issuance until its next meeting. In addition, the bullish tone in global stock markets is reducing demand for the safe-haven Yen and providing support to the USD/JPY pair. However, speculation that the Japanese authorities may intervene to support the national currency, along with ongoing geopolitical tensions and political uncertainty in Europe, should limit a significant decline in the yen.

In addition, hawkish remarks from Bank of Japan Governor Kazuo Ueda earlier this week that the central bank may raise rates in July depending on economic data may deter bears from aggressively betting on the JPY. Meanwhile, the US Dollar (USD) continues to struggle to attract meaningful buyers and languishes near weekly lows amid expectations that the Federal Reserve (Fed) will cut interest rates twice this year, backed by signs of fading inflation. This could help to contain the USD/JPY pair.

Today, market participants pay attention to the economic agenda in the US, where, as usual, initial jobless claims, the Philadelphia Fed manufacturing index and housing market data - building permits and housing starts - will be released. These data, as well as the US bond yields and the Fed's speech will influence the USD price dynamics and will give some impetus to the USD/JPY pair. Traders will focus on broader risk sentiment to capitalize on short-term opportunities ahead of the release of Japanese core CPI and global PMIs on Friday.

Trading recommendation: Trade predominantly with Buy orders from the current price level

The GBP/USD pair has been unable to make meaningful gains on Wednesday and has been fluctuating in a narrow trading range around the round 1.2700 mark during the Asian session. Spot prices, meanwhile, are holding above the one-month low reached last Friday as traders await the release of the latest UK consumer inflation data with interest before positioning themselves for the next leg of directional movement.

The UK core consumer price index is expected to rise to 0.4 per cent in May from the previous reading of 0.3 per cent, while the annual rate is expected to slow to 3.5 per cent from 3.9 per cent in April. The data will play a key role in influencing the British pound (GBP) and will provide some momentum to the GBP/USD pair. The market will then turn its attention to Thursday's Bank of England (BoE) monetary policy meeting, which will help determine the currency pair's near-term trajectory.

In the run-up to key central bank data and risks, weak US Dollar (USD) price action has been a key supportive factor for the GBP/USD pair. Tuesday's weaker-than-anticipated US retail sales report indicated signs of consumer fatigue and confirmed speculation that the Federal Reserve (Fed) may begin cutting interest rates in September. This led to an overnight decline in US Treasury bond yields and is thought to have undermined the dollar.

The aforementioned fundamental backdrop supports the prospects for a significant strengthening of the GBP/USD pair. Nevertheless, the absence of follow-through buying calls for caution before taking a position on the continuation of the recent rebound from the mid-1.2600s or the one-month low reached last Friday.

Trading recommendation: Trading predominantly Buy orders from the current price level.

Specialists at Goldman Sachs Group have revised their year-end forecast for the S&P 500 index (#SP500) upward to 5,600 points. This adjustment is based on the assumption that negative earnings will be below average and that the price-to-earnings ratio is now considered fair.

Yesterday, the S&P 500 reached a new all-time high of 5,488 points! The index has already grown by 15.8% since the beginning of the year, and the upward trend is expected to continue.

We previously discussed the rise of the S&P 500 in April. Our traders closely monitor the market and engage in active trading, so this new surge was not a surprise to them.

The growth of leading American companies strengthens the resilience of the U.S. economy

The stock price of Applied Materials (#AppliedMat) has increased by 56% since the beginning of the year. Applied Materials is an American corporation that provides equipment, services, and software for the production of semiconductor chips used in electronics, flat panel displays, smartphones, televisions, and solar products. The rising demand for electronic chips fuels investor interest in this company.

Motorola Solutions (#Motorola), the successor of one of the oldest U.S. corporations, has transformed into a leading manufacturer of specialized communication devices and holds a monopoly in certain niches. The company's stock has grown by 22.6% since the start of the year. Motorola Solutions focuses on the highly profitable public sector procurement, leading to steady revenue growth for MSI.

Procter & Gamble (#PG) is a global leader in the consumer goods market, well-established in the U.S. and abroad. The stock of this defensive goods group (covering beauty and grooming, healthcare, fabric and home care, and baby, feminine, and family care products) has been growing steadily and reliably. Over the year, their value has increased by 15.6%.

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The Euro-dollar pair is trading down near 1.0730 on Tuesday in the early hours of European trading. A moderate recovery in the US dollar is leading the major pair lower. Traders prefer to stay on the sidelines ahead of the release of Eurozone inflation data and US retail sales data. US retail sales are expected to grow by 0.2% m/m in May.

The pan-European economic data is limited to mid-single digits this week, so markets will focus on Tuesday's upcoming US retail sales data. US retail sales are expected to increase 0.2% y/y in May after being unchanged at 0.0% in the previous month. Core retail sales, excluding auto sales, are also expected to be unchanged at 0.2%.

Various Federal Reserve (Fed) officials are scheduled to speak on the economic calendar during the week, with a number of policymakers expressing a markedly cautious stance on Monday. Although the latest inflation data showed a faster-than-expected decline, the Fed emphasized its reluctance to cut rates prematurely, stressing the need for more data before making any decisions.

At the end of the week, EU and US PMI data scheduled for Friday are expected to diverge: market forecasts expect a slight increase in activity in the EU and a slight decline in US PMIs.

The USD/JPY pair continues to rally near 157.50 in the early Asian session on Monday. The hawkish stance of the US Federal Reserve (Fed) is providing some support to the pair. Meanwhile, the Japanese Yen (JPY) is losing ground as the Bank of Japan (BoJ) decided to keep the interest rate at 0% following its June meeting on Friday.

The Fed left interest rates unchanged in the current range of 5.25% to 5.5% at its last meeting last week, as widely expected. In addition, the Fed revised its forecast for a rate cut to one in 2024. Fed Chairman Jerome Powell said at a press conference that the central bank doesn't yet have the confidence to cut rates and needs more convincing evidence that inflation is moving toward the 2% target. On Sunday, Minneapolis FRB President Neel Kashkari said the "reasonable forecast" is that the Fed will wait to cut interest rates until December, adding that the Fed is in a very good position to get more data before making any decisions.

On Friday, the preliminary report on the Michigan Consumer Sentiment Index, a monthly survey of U.S. consumer confidence, fell to a 7-month low in June at 65.6 from 69.1 in the previous reading, below the forecast of 72.0. Nevertheless, the low consumer confidence data had little impact on the dollar.

As for the yen, the Bank of Japan left the benchmark interest rate unchanged in a range of 0% to 0.1% at the end of its two-day meeting on Friday, but indicated that it may reduce its purchases of Japanese government bonds after its next monetary policy meeting in July. Bank of Japan Governor Kazuo Ueda also said he did not rule out raising interest rates in July as the weakening Japanese yen (JPY) drives up the cost of imports. "The decision suggests that the BOJ is very cautious about reducing bond purchases, which means the central bank is also cautious about raising rates," said Takayuki Miyajima, senior economist at Sony Financial Group. This dovish stance of the BoJ continues to undermine the Japanese Yen and acts as a tailwind for the USD/JPY pair.

Trading recommendation: Trade mainly with Buy orders from the current price level

The EUR/USD is trading at a flat rate of around 1.0735 on Friday in early Asian trading. The pair's growth may be limited due to uncertainty related to the European Parliament elections. Investors will be focusing on Christine Lagarde's speech at the ECB and the preliminary Michigan consumer sentiment report for June.

The European Parliament elections have exposed rifts in several member states. In France, following the defeat of the far-right Rassemblement Nationale, President Emmanuel Macron dissolved parliament and called snap elections, which could result in a strengthening of the far-right in the country's parliament, according to the website of the European Council on Foreign Relations.

The combination of political uncertainty in Europe and rate cuts by the European Central Bank (ECB) could put some pressure on the Euro (EUR) against the US Dollar at the moment. At its June meeting last week, the ECB cut interest rates by 25 basis points (bps), a move widely anticipated by market participants. As a result, the ECB's key rate fell to 3.75% from a record 4% since September 2023. Financial markets have fully priced in another rate cut this year, but economists polled by Reuters last week forecast two more rate cuts by the end of 2024.

The US producer price index (PPI) came in weaker than expected, with a 2.2% increase in May compared to April's 2.3% (revised from 2.2%), according to the US Bureau of Labour Statistics' Thursday report. In contrast, the core producer price index increased by 2.3% year-on-year in May, below the consensus estimate of 2.4% and April's 2.4%. The number of individuals filing initial jobless claims in the US for the week ending 6 June increased by 242,000 from the previous week, exceeding the market consensus forecast of 225,000.

However, the weak US economic data did not result in a decline of the dollar against its peers, as the Federal Reserve (Fed) signalled that it will cut its key interest rate just once by 25 basis points (bps) until the end of 2024. In a statement to the BBC, Fed Chairman Jerome Powell indicated that only "modest" progress had been made towards the target. He also noted that the US central bank would need to see a "good measure of inflation" before cutting interest rates.

The Japanese Yen (JPY) retreated from its recent gains on Thursday, while the US Dollar (USD) rose following assertive statements from the US Federal Reserve (FOMC), boosting the USD/JPY pair. At its meeting on Wednesday, the Federal Open Market Committee (FOMC) left the benchmark lending rate unchanged at 5.25-5.50 per cent for the seventh consecutive time, as expected.

The Japanese Yen may experience limited declines as market participants exercise caution ahead of the Bank of Japan's (BoJ) decision on Friday. While the BoJ is expected to leave interest rates unchanged, traders will be monitoring any announcements regarding a potential reduction in the central bank's monthly bond purchases.

The CME FedWatch Tool indicates that the probability of a Federal Reserve interest rate reduction of at least 25 basis points in September has decreased to 61.5% from 69.4% a week earlier.

On Thursday, investors will be monitoring the release of the Producer Price Index (PPI) data, which is expected to provide further insight into the current state of the US economy.

Trade recommendation: Trading mainly by Buy orders from the current price level.