Forex Today: US Dollar bulls fight back

What you need to know on Wednesday, June 21:

The US Dollar kept grinding higher on Tuesday as the market mood soured on fears that Chinese economic growth has lost momentum. The focus now shifts to Federal Reserve Chairman Jerome Powell's testimony before Congress.

The People's Bank of China (PBoC) cut two key lending rates for the first time in almost a year amid concerns about slowing growth. The central bank cut the one-year loan prime rate by 10 basis points from 3.65% to 3.55% and the five-year loan prime rate by 10 basis points from 4.3% to 4.2%.

The Reserve Bank of Australia (RBA) published the Minutes of its latest meeting. The document showed that Broad discussed two options, either increasing the cash rate by 25 basis points (bps) or holding it unchanged. Arguments were "finely balanced," but policymakers ended up opting for a hike amid increased risk inflation would take longer to return to target than had been expected. AUD/USD plunged, ending the day at around 0.6780.

Japanese authorities came out with some verbal intervention after USD/JPY hit 142.24, a fresh 2023 yearly high. Finance Minister Shun'ichi Suzuki said that FX stability is important, adding they are watching FX moves closely on a daily basis. USD/JPY shed roughly 100 pips on Tuesday.

Upbeat United States data gave the US Dollar another push early in the American session, as Building Permits were up by 5.2% MoM in May, while Housing Starts surged 21.7%, well above the market's expectations.

EUR/USD finished the day little changed, just above the 1.0900 mark after briefly piercing the level. European Central Bank (ECB) Governing Council member Olli Rehn hit the wires. Rehn noted that underlying inflation is easing only gradually "but not to the extend desired." His hawkish words reaffirmed the message delivered by the central bank last week and came as a no-surprise to financial markets.

GBP/USD hovers around 1.2750 as investors await UK inflation data and the Bank of England Monetary policy decision.

XAU/USD shed roughly $20 at the beginning of the American session, briefly piercing the $1,930 level, to end the day closer to $1,940, down for a third consecutive day.