Forex Today: Risk flows dominate the scene

What you need to take care of on Wednesday, June 1:

The day will start with Australia releasing the Q1 Gross Domestic Product and the May AIG Manufacturing PMI. Disappointing readings could unleash risk aversion after poor Chinese data released early Tuesday.

EU inflation soared to a record high of 8.1% YoY in May, according to preliminary estimates, further fueling concerns about the future of major economies. Asian and European stocks edged lower. Wall Street aimed to trim early losses but gave up ahead of the close and ended the day also in the red.

Meanwhile, EU representatives reached a deal over the sixth package of sanctions on Russia. They agreed to ban 90%  of the country's oil imports by the end of the year. Charles Michel, president of the European Council, said the move would immediately hit 75% of Russian oil imports. The embargo covers petroleum and derivatives brought in by sea, allowing a temporary exemption for imports delivered by pipeline.

Sanctions also include an asset freeze and travel ban on individuals and excluding the Russian biggest bank, Sberbank, from the SWIFT system. Finally,  leaders agreed to provide Ukraine with a €9 billion tranche of assistance to support the war-torn country's economy.

Crude oil prices soared at the start of the day but were sharply down during US trading hours. The black gold was affected by headlines indicating that OPEC members are considering exempting Russia from their oil production deal. WTI traded as high as $119.96 a barrel but settled at around $115.20.

Gold was unable to take advantage of the dismal mood and finished the day in the red below $1,840 a troy ounce.

Across the FX board, there was little change. The American dollar appreciated during the first half of the day but gave up during the US session. The EUR/USD pair trades around 1.0730, while GBP/USD stands around 1.2600.

The USD/JPY pair advanced alongside US Treasury yields, now trading at around 128.60, but USD/CHF saw little action and is currently at 0.9590.

The AUD/USD pair eased at the end of the day, posting modest losses as per trading in the 0.7170 price zone. The Canadian dollar appreciated alongside oil, with USD/CAD down to 1.2640.