Here's what you need to know to trade today Tuesday, May 21:
Major currency pairs continue to fluctuate in known ranges early Tuesday, after closing the first day of the week with little change. Eurostat will publish current account and trade balance data for March. Later, Statistics Canada will release the Consumer Price Index (CPI) for April. Most importantly, Bank of England Governor Andrew Bailey and Federal Reserve Chairs Christopher Waller, John Williams, Raphael Bostic and Loretta Mester will each give speeches.
In the absence of high-level data releases, investors refrained from taking large positions on Monday. Wall Street's main indices closed the day mixed, with the US Dollar Index (USD) posting marginal gains and the benchmark 10-year US Treasury yield slipping slightly to end the day above 4.4%. Early Tuesday, the Dollar Index is moving sideways around 104.50 and US stock index futures are trading virtually unchanged on the day.
US Dollar Prices Today
The following table shows the percentage change of the United States Dollar (USD) against the main currencies quoted today. The US Dollar was the strongest currency against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | -0.08% | -0.12% | 0.03% | 0.00% | -0.00% | -0.07% | |
| EUR | 0.06% | -0.02% | -0.03% | 0.07% | 0.06% | 0.04% | -0.00% | |
| GBP | 0.08% | 0.02% | -0.06% | 0.10% | 0.09% | 0.06% | 0.01% | |
| JPY | 0.12% | 0.03% | 0.06% | 0.16% | 0.12% | 0.10% | 0.06% | |
| CAD | -0.03% | -0.07% | -0.10% | -0.16% | -0.02% | -0.04% | -0.09% | |
| AUD | 0.00% | -0.06% | -0.09% | -0.12% | 0.02% | -0.02% | -0.05% | |
| NZD | 0.00% | -0.04% | -0.06% | -0.10% | 0.04% | 0.02% | -0.06% | |
| CHF | 0.07% | 0.00% | -0.01% | -0.06% | 0.09% | 0.05% | 0.06% |
The heat map shows the percentage changes of the major currencies against each other. The base currency is chosen in the left column, while the quote currency is chosen in the top row. For example, if you choose the US Dollar in the left column and scroll down the horizontal line to the Japanese Yen, the percentage change in the box will represent USD (base)/JPY (quote).
During Asian trading, the Reserve Bank of Australia (RBA) released minutes from its May policy meeting, noting that board members considered raising rates and judged that maintaining policy stable was appropriate. Additional details in the release showed that the board agreed that it was difficult to rule out or decide on future changes to the cash rate, according to Reuters. He AUD/USD did not immediately react to the RBA minutes and traded slightly lower around 0.6660.
He EUR/USD was unable to consolidate the previous week's gains and posted small losses on Monday. The pair remained stable above 1.0850 in the European morning on Tuesday.
He GBP/USD It swung in a narrow channel and closed a few pips above 1.2700 on Monday. The pair registers small losses near 1.2720 in the early hours of the European session.
After setting a new all-time high of $2,450 earlier in the week, the Gold It erased much of its gains and closed below $2,430 on Monday. XAU/USD remains under bearish pressure early on Tuesday and is trading below $2,420.
He NZD/USD appears to have stabilized around 0.6100 after losing almost 0.5% on Monday. The Reserve Bank of New Zealand will announce its monetary policy decisions in the early hours of the Asian session on Wednesday.
He USD/JPY rose on Monday and ended the day above 156.00. The pair remains in a consolidation phase around this level early on Tuesday.
The Fed FAQs
The monetary policy of the United States is directed by the Federal Reserve (Fed). The Fed has two mandates: achieving price stability and promoting full employment. Your main tool to achieve these objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the Federal Reserve's 2% target, it raises interest rates, raising borrowing costs throughout the economy. This translates into a strengthening of the US Dollar (USD), as it makes the United States a more attractive place for international investors to place their money. When inflation falls below 2% or the unemployment rate is too high, the Federal Reserve can lower interest rates to encourage borrowing, which weighs on the greenback.
The Federal Reserve (Fed) holds eight meetings a year, in which the Federal Open Market Committee (FOMC) evaluates the economic situation and makes monetary policy decisions. The FOMC is made up of twelve Federal Reserve officials: the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the eleven presidents of the regional Reserve banks, who serve for one year on a rotating basis.
In extreme situations, the Federal Reserve can resort to a policy called Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit into a clogged financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed's weapon of choice during the Great Financial Crisis of 2008. It involves the Fed printing more dollars and using them to buy high-quality bonds from financial institutions. QE usually weakens the US dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the capital of the maturing bonds it has in its portfolio to buy new bonds. It is usually positive for the value of the US Dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
