Forex Today: US Dollar corrects lower amid cautious markets

On Tuesday, the Reserve Bank of Australia is scheduled to release its minutes. Additionally, Chinese data is also due, while the UK will report employment figures and the Eurozone will provide growth data. Furthermore, US President Biden will meet with McCarthy, and the US will release Retail Sales data.

Here is what you need to know on Tuesday, May 16:

The US Dollar dropped on Monday, as equity prices rose modestly in Wall Street. US yields rose again, with the 10-year Treasury yield climbing above 3.50%, and the 2-year above 4.0%.

Economic data from the US surprised to the downside, with the New York Empire Manufacturing falling from 10.8 to -31.8, the largest fall since April 2020. On Tuesday, the Retail Sales data is due. 

Market participants will continue to watch closely the debt ceiling drama; the White House announced that President Biden will meet on Tuesday with House Speaker Kevin McCarthy.

EUR/USD rose from monthly lows and closed around 1.0870. The Euro lagged on Monday; Eurozone GDP and Employment data are due on Tuesday.

GBP/USD jumped back above 1.2500 and EUR/GBP posted the lowest daily close in five months below 0.8680. The UK will report employment on Tuesday.

The Japanese Yen was the worst performer, affected by higher government bond yields. USD/JPY rose for the third consecutive day, climbing above 136.00.

AUD/USD rebounded, erasing Friday's losses and retaking 0.6700. The Reserve Bank of Australia (RBA) will release the minutes of its latest meeting on Tuesday; the Employment report is due on Thursday.

NZD/USD rose after losing 180 pips during the previous two sessions, approaching 0.6250.

USD/CAD pulled back to 1.3450, weakened by a slide of the US Dollar and a rally in crude oil prices, which rallied 1.80%. Canada will report April consumer inflation on Tuesday.

Canadian CPI Preview: Forecasts from five major banks, inflation likely to ease again

Gold rose modestly but failed to hold above $2,020/oz; Silver closed above $24.00.