The AUD/USD pair is trading at a neutral basis near the 0.7250 level after the US Producer Price Index (PPI) for April came in unexpectedly hot.

ING’s Chris Turner reports that Sterling weakened independently as UK politics took centre stage, with Prime Minister Keir Starmer facing potential leadership challenges from figures like Wes Streeting, Andy Burnham and Angela Rayner.

The United States (US) Producer Price Index jumped to 6% on a yearly basis in April, following the 4.3% posted in March and largely surpassing the expected 4.9%. On a monthly basis, the PPI rose 1.4%, doubling the March reading of 0.7%, and much higher than the anticipated 0.5%.

Scotiabank strategists Shaun Osborne and Eric Theoret note USD/CAD is steady around 1.3695, with the Canadian Dollar (CAD) seen as cheap versus a fair value estimate near 1.3510.

Gold (XAU/USD) consolidates minor losses on Wednesday as the US Dollar (USD) extends its recovery amid persistent uncertainty over US-Iran talks and growing expectations that the Federal Reserve (Fed) could keep interest rates higher for longer.

TD Securities strategists note Silver is maintaining its upside, trading resiliently despite higher energy prices. While recent CTA (Commodity Trading Advisors) buying has slowed, they see renewed interest from Chinese traders on SHFE (Shanghai Futures Exchange) and strong Chinese premiums.

GBP/JPY extends losses for the second consecutive day on Wednesday as the British Pound (GBP) comes under broad pressure, weighed down by rising political uncertainty in the United Kingdom.

Producer inflation in the United States, as measured by the change in the Producer Price Index (PPI), rose to 6% on a yearly basis in April from 4.3% in March, the US Bureau of Labor Statistics (BLS) reported on Wednesday.

TD Securities’ Global Strategy Team says Australia’s 2026/27 Budget is slightly stimulatory, with looser fiscal policy and more upbeat Treasury forecasts than the RBA.

Germany Current Account n.s.a. increased to €23.6B in March from previous €22B

United States Producer Price Index (YoY) came in at 6%, above expectations (4.9%) in April

United States Producer Price Index ex Food & Energy (YoY) came in at 5.2%, above forecasts (4.3%) in April

United States Producer Price Index ex Food & Energy (MoM) registered at 1% above expectations (0.3%) in April

United States Producer Price Index (MoM) above forecasts (0.5%) in April: Actual (1.4%)

The Euro (EUR) has bounced up to levels above 1.1700 against the Dollar (USD) but remains nearly 0.6% below Tuesday's high at 1.1787, as the US Dollar is supported by hot inflation figures on Wednesday.

Commerzbank’s Antje Praefcke notes that rising US inflation and elevated energy prices complicate incoming Fed Chair Kevin Warsh’s efforts to secure early rate cuts.

Brazil Retail Sales (MoM) registered at 0.5% above expectations (0%) in March

The GBP/USD pair is down 0.25% to near 1.3500 during the European trading session on Wednesday. The Cable faces selling pressure as the US Dollar (USD) trades firmly due to growing expectations that the Federal Reserve (Fed) will deliver at least one interest rate hike this year.

BNY’s Bob Savage highlights that India has reversed earlier duty cuts by raising import tariffs on Gold and Silver to 15% from May 2026. The move aims to curb bullion imports, narrow the trade deficit and support the Rupee amid external pressures.

Gold (XAU/USD) ticks lower for the second consecutive day on Wednesday, but remains steady, halfway through the weekly trading range, trading a few pips below $4,700 at the time of writing.

ING economists Gerben Hieminga and Rico Luman argue that the Middle East conflict and closure of the Strait of Hormuz have sharply lifted oil-based bunker costs, improving LNG’s relative appeal.

India M3 Money Supply increased to 12% in April 27 from previous 11.9%

TD Securities’ Global Strategy Team highlights that markets will scrutinize the Bank of Canada’s Summary of Deliberations for more detail on April’s decision and two‑sided guidance.

European Central Bank (ECB) official and Finnish Central Bank Governor Olli Rehn said during European trading hours on Wednesday that higher oil prices should not be the only factor to direct monetary policy decisions. Rehn added that the central bank needs to assess the scope of energy shocks.

United States MBA Mortgage Applications up to 1.7% in May 8 from previous -4.4%

According to a Reuters poll, the European Central Bank (ECB) will hike the deposit rate by 25 basis points (bps) to 2.25% in June, said 59 of 70 economists (vs 44 of 85 in April survey).

The Euro (EUR) is showing one of the weakest performances among the G8 currencies on Wednesday, and extends its reversal against the British Pound (GBP) to levels nearing 0.8650 at the time of writing, after failing at the 0.8700 area on Tuesday.

European Central Bank (ECB) policymaker Madis Muller said on Wednesday that a fast resolution in the Strait of hormuz is needed for the ECB to hold rates unchanged in June.

Danske Research Team highlights that United States (US) Consumer Price Index (CPI) data showed strong core and services inflation, reinforcing concerns about persistent underlying price pressures. Shelter and super-core components rose, while core goods remained flat.

Germany 30-y Bond Auction: 3.62% vs 3.57%