The USD is lower for the 2nd consecutive day. EURUSD/USDJPY between MAs in neutral area.

The dollar decline has continued today with the greenback falling by -1% vs the JPY. The declines vs the EUR (-0.35%) and the GBP (-0.24%) have been less (and the EURUSD and GBPUSD are off their extremes for the day). Nevertheless, after the gains on Monday after the US/China deal, the greenback has retraced those gains and more.

For the EURUSD and the USDJPY, the price moves have taken the price back between the 100/200 hour MAs or into a more neutral territory. For the GBPUSD, the pair has moved back above those two key MAs putting the buyers more in control from a technical perspective.

In the video above, I take a technical look at those three major currency pairs to kickstart the US trading day.

Overnight in central bank commentary:

• ECB policymaker Joachim Nagel expressed optimism that the eurozone is on track to reach its 2% inflation target, though he emphasized that uncertainty is likely to remain a persistent feature of the economic landscape. He noted that central banks must adapt to this new “normal” of ongoing unpredictability. Nagel highlighted the importance of upcoming staff projections in June, while acknowledging the unknown impact that tariffs could have on inflation and broader economic conditions. The ECB’s June rate decision will depend heavily on incoming data. Separately, Nagel also commented on the global financial system, stating that while the U.S. dollar remains dominant, the euro is expected to gain strength as a reserve currency in the coming years.
• Fed’s Goolsbee, a 2025 voter, indicated that part of the April inflation data reflects the lagged nature of how inflation trends appear in economic reports. He emphasized that the Federal Reserve is still in a wait-and-see mode, holding off on major decisions until more information becomes available. Goolsbee noted that it will take time for current inflation dynamics to be accurately reflected, cautioning against drawing conclusions from short-term volatility. He stressed the importance of looking past the noise in the data before forming any long-term policy judgments.

Feds Daly (SF Fed Pres – nonvoting member) and Jefferson (FOMC Governor) are both scheduled to speak later today

US stocks are higher after gains in the broader S&P and Nasdaq yesterday (the Dow fell due to UnitedHealth’s tumble) with the futures currently implying:

• Dow Industrial average futures implying a gain of 21.57 points. Yesterday the index fell -269.87 points or -0.64%. UnitedHealth contributed to a decline of -400 points itself
• S&P index futures are implying a gain of 12.45 points. Yesterday, the index rose 42.36 points or 0.72%. The S&P index closed positive on the year by 0.08% yesterday..
• Nasdaq futures are implying a gain of 76.30 points. Yesterday the index gained 301.74 points or 1.61%

In the European markets, the major indices are mixed:

• German Dax, -0.30%. Yesterday the index closed at a record level
• France’s CAC, -0.38%
• UK FTSE 100, +0.04%
• Spain’s Ibex, +0.34%
• Italy’s FTSE MIB, +0.39%

In the US debt market, yields are higher

• 2-year yield 4.013%, -0.4 basis points
• 5-year yield 4.108%, -1.3 basis points
• 10-year yield 4.480%, -1.8 basis points
• 30-year yield 4.921%, -2.2 basis points

In other markets:

• Crude oil down $0.70 on -1.10% at $62.97
• Silver unchanged at $32.88
• Gold is down $29 or -0.91% at $3219.50
• Bitcoin is trading up little changed at $104,063

The economic calendar is light with the Canada building permits scheduled for 830. The expectations are -0.5% versus +2.9% last month.

At 10:30 AM ET, the weekly inventory data will be release with crude oil inventories expected to show a drop of -1.078 million. Gasoline is expected to fall by -0.561 million while distillates are expected to show a build of 0.129 million..

The private data released late yesterday showed a surprise build of 4.287 million in crude inventories. Gasoline inventories fell -1.374 million and distillates fell -3.675 million