NZD/USD trades around 0.5820 on Wednesday at the time of writing, down 0.24% on the day as investors reduce risk exposure ahead of the Federal Reserve (Fed) monetary policy announcement.

The Japanese Yen (JPY) remains under pressure despite the Bank of Japan’s latest rate hike, with analysts highlighting that the move has not been enough to trigger a sustained  recovery for the Japanese currency.

USD/CAD trades around 1.4010 on Wednesday at the time of writing, gaining 0.10% on the day. The pair maintains a bullish tone as the Canadian Dollar (CAD) remains under pressure from falling Oil prices, while traders position ahead of the Federal Reserve’s (Fed) monetary policy decision.

National Bank of Canada (NBC) analysts discuss the Canadian Dollar, noting that USD/CAD remains range-bound and sensitive to upcoming Canadian and US data releases. They highlight how recent moves have been driven by shifting expectations for Bank of Canada and Federal Reserve policy.

The Euro (EUR) posts moderate losses against the US Dollar (USD) on Wednesday, giving away some of the ground gained over the last few days, with markets showing a cautious mood ahead of the US Federal Reserve’s (Fed) decision.

Societe Generale’s Kit Juckes notes that recent G10 policy moves, including a BOJ hike, have not produced dramatic FX shifts. He argues that a dovish Fed outcome would favour short USD/JPY positions.

The Japanese Yen (JPY) nurses mild gains against the US Dollar (USD) on Wednesday, as the USD/JPY pair eases to 160.20, still above 160.00, considered the limit of tolerable JPY weakness for Japanese authorities.

UOB Global Economics & Markets Research notes that AUD/USD was little changed after the Reserve Bank of Australia paused at 4.35% following three consecutive 25 bps hikes.

Germany 30-y Bond Auction declined to 3.49% from previous 3.62%

Brown Brothers Harriman highlights GBP/USD trading around its 200-day moving average as UK Gilts outperform European bonds.

ING’s FX team notes that a rate hike by the ECB is fully priced into EUR/USD, limiting upside for the Euro. They stress that even additional ECB hawkishness may not translate into Euro gains, as markets already discount tighter policy.

The AUD/USD pair struggles to capitalize on the previous day's hawkish Reserve Bank of Australia (RBA)-inspired bounce and trades with a negative bias for the second consecutive day on Wednesday.

Eurozone Harmonized Index of Consumer Prices (MoM) meets forecasts (0.1%) in May

Eurozone Harmonized Index of Consumer Prices (YoY) in line with forecasts (3.2%) in May

Eurozone Core Harmonized Index of Consumer Prices (YoY) above expectations (2.5%) in May: Actual (2.6%)

Eurozone Core Harmonized Index of Consumer Prices (MoM) unchanged at 0.3% in May

The Australian Dollar (AUD) has entered a corrective phase, surrendering part of its recent gains against the US Dollar, after the Reserve Bank of Australia (RBA) opted to break its tightening cycle and hold its benchmark cash rate at 4.35%. 

Societe Generale analysts observe EUR/USD has rebounded after defending the April low at 1.1500 but see no clear signs yet of a broader uptrend.

The GBP/JPY cross attracts heavy selling following the release of UK consumer inflation figures on Wednesday and, for now, seems to have snapped a three-day winning streak.

The USD/CAD pair trades in positive territory around 1.4005 during the early European trading hours on Wednesday. Optimism surrounding the US-Iran peace agreement drags crude oil prices lower and weighs on the commodity-linked Canadian Dollar (CAD).

Deutsche Bank comments that despite recent declines in Oil and Euro inflation swaps, ECB chief economist Philip Lane warns that earlier energy shocks will still feed through to prices.

The British Pound (GBP) holds marginal losses against the US Dollar (USD) on Wednesday, trading at 1.3422 after hitting weekly lows at 1.3414.

The EUR/GBP cross gathers strength to around 0.8650 during the early European trading hours on Wednesday. The British Pound (GBP) weakens against the Euro (EUR) following the UK inflation report for May.

The USD/JPY pair loses ground to near 160.25 during the early European trading hours on Wednesday. Traders prefer to wait on the sidelines ahead of the US Federal Reserve (Fed) interest rate decision under new Chair Kevin Warsh later on Wednesday. 

USD/IDR gains ground after two days of losses, trading around 17,770 during the Asian hours on Wednesday. The pair appreciates as the Indonesian Rupiah (IDR) faces challenges as traders adopt caution ahead of the Federal Reserve (Fed) policy decision due later in the day.

The EUR/USD pair trades with a positive bias for the third straight day and holds steady above the 1.1600 mark through the Asian session on Wednesday.

The AUD/JPY cross trades in negative territory around 113.25 during the early European session on Wednesday. The Japanese Yen (JPY) edges higher against the Australian Dollar (AUD) after the Bank of Japan (BoJ) raised interest rates to their highest level in more than three decades. 

The Indian Rupee (INR) holds ground after two days of gains against the US Dollar (USD) on Wednesday. However, the upside potential for the USD/INR pair could be capped in the near term as downward pressure on the Indian Rupee eases, supported by declining global oil prices.

The AUD/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and holds above the 0.7050 level through the Asian session on Wednesday amid mixed cues.

EUR/JPY depreciates after three days of gains, trading around 186.20 during the Asian hours on Wednesday. The currency cross holds a constructive bullish bias as it remains above both the nine-day and 50-day Exponential Moving Averages (EMAs).