The New Zealand Dollar (NZD) appreciates more than 1.5% against the US Dollar (USD) on Wednesday, as rumours that Washington and Iran are close to a peace deal have boosted risk appetite.

ING’s Chris Turner calls Brazil one of his preferred emerging markets, citing strong terms of trade, buoyant equities and expectations of 100bp in rate cuts.

GBP/USD advances on Wednesday and trades around 1.3630 at the time of writing, up 0.65% on the day, benefiting from the broad weakness of the US Dollar (USD).

BNY’s Bob Savage highlights a sharp Japanese Yen (JPY) rally, with USD/JPY dropping as low as 155.04 before partially reversing, in a move widely seen as fresh official intervention. Authorities are viewed as defending the 160 level to curb speculative shorts.

The Australian Dollar (AUD) accelerated its uptrend against the US Dollar (USD) on Wednesday, breaching previous highs at the 0.7225 area and hitting levels near 0.7270 for the first time since August 2022.

USD/JPY drops sharply on Wednesday and trades around 155.80 at the time of writing, down 1.31% on the day, as the Japanese Yen (JPY) benefits from both suspected intervention by Japanese authorities and broad-based weakness in the US Dollar (USD).

The Euro (EUR) rallies more than 0.5% against the US Dollar (USD) on Wednesday, trading at 1.1760 at the time of writing, after hitting session highs at 1.1770.

MUFG’s Derek Halpenny argues that recent USD/JPY moves likely reflect renewed Japanese Ministry of Finance intervention, with the pair dropping nearly three big figures after testing the 158.00 area.

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)-