Rabobank’s FX Strategy team argues that current market pricing for up to three Bank of England hikes over the next year is excessive given a loosening UK labour market and lacklustre growth.

Eurozone Producer Price Index (MoM) above forecasts (3.3%) in March: Actual (3.4%)

Eurozone Producer Price Index (YoY) above expectations (1.8%) in March: Actual (2.1%)

Silver (XAG/USD) rallies on Wednesday to erase the previous two days' losses and reaches session highs above $76.00 at the time of writing, favoured by the US Dollar's weakness.

Here is what you need to know on Wednesday, May 6:

Commerzbank's Antje Praefcke expects the the central bank of Sweden, Riksbank to leave its policy rate unchanged at 1.75% while reiterating its readiness to hike if needed.

Eurozone HCOB Composite PMI climbed from previous 48.6 to 48.8 in April

Eurozone HCOB Services PMI above expectations (47.4) in April: Actual (47.6)

Germany HCOB Services PMI meets forecasts (46.9) in April

Germany HCOB Composite PMI came in at 48.4, above expectations (48.3) in April

France HCOB Composite PMI meets forecasts (47.6) in April

France HCOB Services PMI meets expectations (46.5) in April

Rabobank's Senior Market Strategist Benjamin Picton reports the Reserve Bank of Australia (RBA) has delivered a third consecutive 25 bp hike, taking the cash rate to 4.35% and matching the previous cycle high.

USD/CAD extends its losses for the second successive day, trading around 1.3590 during the early European hours on Wednesday. However, the technical analysis of the daily chart indicates the pair is positioned within the descending channel pattern, signaling an ongoing bearish bias.

Italy HCOB Services PMI above forecasts (47.6) in April: Actual (49.8)

The GBP/JPY cross retreated nearly 350-pips from the weekly top, around the 214.20-214.25 region set earlier this Wednesday, amid another suspected government intervention to prop up the Japanese Yen (JPY).

The Pound (GBP) accelerates its recovery against the US Dollar (USD) on Wednesday, reaching session highs at 1.3595 so far, after bouncing from weekly lows near 1.3500 on Tuesday.

The New Zealand Dollar (NZD) is rallying sharply against the US Dollar (USD) on Wednesday, as comments from US officials suggesting the war with Iran might be nearing its end have boosted investors’ appetite for risk.

The EUR/GBP cross trades on a flat note near 0.8635 during the early European trading hours on Wednesday. Traders prefer to wait on the sidelines ahead of the upcoming UK local elections on Thursday. 

Commerzbank’s Antje Praefcke argues that geopolitical developments around the Iran conflict remain the primary driver for EUR/USD, outweighing upcoming US data such as ADP and Nonfarm Payrolls (NFP) .

The EUR/USD pair gathers strength around 1.1730 during the early European trading hours on Wednesday. The Euro (EUR) edges higher against the US dollar (USD) amid hopes for a US-Iran peace deal. Traders will keep an eye on the release of the US ADP April Employment Change report later on Wednesday.

The Euro (EUR) has dropped sharply against the Japanese Yen (JPY) on Wednesday, falling from levels just below 185.00 to 182.05 before returning to 183.40 at the time of writing. Similar moves in other Yen crosses point to another intervention of the Japanese Ministry of Finance (MOF)-

USD/CHF loses ground for the second successive day, trading around 0.7800 during the Asian hours on Wednesday. The pair declines as the US Dollar (USD) weakens amid rising optimism that Washington could secure a deal with Iran.

The USD/JPY pair falls to around 156.15 during the early European session on Wednesday. The Japanese Yen (JPY) strengthens on suspected massive government interventions aimed at curbing its weakness against the US Dollar (USD).

The AUD/JPY cross tumbles to near 112.75 during the early European session on Wednesday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) on suspected interventions from Japanese authorities. 

The AUD/USD pair is seen building on the previous day's bounce from the 0.7135 region, or the weekly low, and gaining strong follow-through positive traction for the second straight day on Wednesday.

Silver price (XAG/USD) rises after two days of losses, trading around $75.20 per troy ounce during the Asian hours on Wednesday.

The USD/JPY pair loses ground to around 157.65 during the Asian trading hours on Wednesday. The US Dollar (USD) weakens against the Japanese Yen (JPY) after US President Donald Trump announces a pause on 'Project Freedom' in the Strait of Hormuz.

USD/CAD extends its losses for the second successive day, trading around 1.3600 during the Asian hours on Wednesday. The pair retreats as the US Dollar (USD) softens on reduced safe-haven demand, driven by rising optimism over a potential deal with Tehran.

The GBP/USD pair attracts buyers for the second consecutive day on Wednesday and moves away from the weekly low, around the 1.3515-1.3510 area, which was touched the previous day.