Forex Today: Dollar weakens before key US inflation data

During the Asian session, Japan will release the Producer Price Index and RBA’s Bullock will participate in a panel. The key event on Wednesday will be US consumer inflation data. Later, the Federal Reserve will publish the minutes of the latest FOMC meeting. The Bank of Canada will have its monetary policy meeting. The Dollar looks weak ahead of busy hours. 

Here is what you need to know on Wednesday, April 12:

The US Dollar Index dropped after rising for four days on the day before the release of the March US Consumer Price Index (CPI). Also on Wednesday, the minutes of the latest FOMC will be published. The economic figures and the minutes could have large implications for markets and monetary policy expectations. 

US CPI Preview: US Dollar on the back foot and poised to fall further

US yields rose on Tuesday but did not help the Greenback. The US 10-year yield reached levels above 3.45% and the 2-year peaked at 4.08%. Stocks in Europe finished higher after Easter Monday and Wall Street posted mixed results. The International Monetary Fund downwardly revised its global growth forecast for 2023 to 2.8%. 

USD/JPY erased losses during the American session rising back to the 133.70 zone. Bank of Japan’s Ueda signaled they are not in any hurry to change the current stance of monetary policy. Japan's Producer Price Index is due on Wednesday. 

EUR/USD rebounded on Tuesday, retaking 1.0900; the move higher was capped by 1.0930. The pair looks bullish supported by a weaker US Dollar and expectations of another rate hike from the European Central Bank (ECB). The Euro outperformed most of its major rivals.

GBP/USD rose on Tuesday after four days of losses, ending above 1.2400. Market participants continue to see a new rate hike from the Bank of England in May. 

NZD/USD extended the slide from last week's spike and broke below 0.6200, to the lowest level in two weeks. The Kiwi was the worst G10 performer. New Zealand Credit Card spending data is due on Wednesday. EUR/NZD rose above 1.7600, to the highest level since November 2020. 

AUD/USD peaked at 0.6680 and then pulled back to 0.6650. The short-term bias point to the downside ahead of the Australian Employment report due on Thursday. 

USD/CAD resumed the downside on Tuesday and dropped toward 1.3450. On Wednesday, the Bank of Canada will announce its decision on monetary policy. No change in rates is expected. The focus will be on projections and the presser. 

Gold rose above $2,000 despite higher yields, and Silver above $25.00. Bitcoin reached $30,000 for the first time since June of last year.