The Fed is certainly keeping things interesting, with policymakers now suddenly suggesting that they may "skip" a rate hike in June. The coordinated message yesterday doesn't seem to be coincidental and we'll have to see if there will be more later today and tomorrow, all before the blackout period beginning 3 June.
That said, economic data will also be a crucial element in all of this and we will be getting US non-farm payrolls on Friday before looking to the CPI data on 13 June - just a day before the Fed decision.
Nonetheless, the dollar remains in a good spot overall with EUR/USD still keeping under 1.0700 and the likes of AUD/USD and NZD/USD knocking on the door of a further break below key support at 0.6500 and 0.6000 respectively.
USD/JPY though is a bit of a tough one to figure out after the drop back under 140.00 this week. Month-end flows might be something that affected the pair, especially with the action in Treasuries. 10-year yields are now back higher on the day, up by over 3 bps to 3.67% now that we are putting behind us the month of May.
Elsewhere, gold is holding the line at the 100-day moving average this week and keeping just above $1,960 for now. The near-term chart suggests buyers are in control again but any rebound remains tentative for now as traders reassess the dollar situation as well.
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