U.S. Unemployment Claims, Trade Balance, Factory Orders, BOC Governor Speaks

The EUR/USD pair bumped higher on Wednesday ending the session with moderate gains of 0.48%. The Fed kept interest rates steady on Wednesday, as widely expected and at the same time Chair Jerome Powell, in his post-meeting address, offered somewhat mixed signals on the path of rates.

Fed Chair Powell mentioned the importance of jobs figures to ascertain the inflation outlook for the US, adding additional weight to this Friday's upcoming US Nonfarm Payrolls (NFP) report.

The latest data from the US Bureau of Labor Statistics revealed a decrease in Job Openings. In the last business day of March, openings dropped to 8.488M, down from March's revised figure of 8.813M and below the anticipated 8.680M.

Gold prices rose on Wednesday rebounding back above the key level of $2300 per ounce, although momentum in the yellow metal was stalled by persistent expectations of higher-for-longer U.S. interest rates.

The yellow metal rebounded in overnight trade after the Federal Reserve quashed expectations for any further interest rate hikes- which pulled down the dollar and offered some relief to commodity prices.

But the Fed still signalled it was in no hurry to begin cutting interest rates- a trend that is expected to limit any major upside in gold.

Oil prices settled lower Wednesday, as an unexpected build in U.S. stockpiles and signs that the Federal Reserve is set to keep rates higher for longer than previously expected weighed on sentiment.

Data from the Energy Information Administration, showed U.S. inventories for the week ended Apr. 26, jumped by 7.3M barrels, confounding expectations for a draw of 2.3M barrels.

The data suggest that oil supplies were not as tight as initially expected in the world’s biggest fuel consumer.

Moreover, expectations that a ceasefire agreement between Israel and Hamas could be in sight have grown following a renewed push led by Egypt.

U.S. stock index futures rose on Wednesday after a whipsaw session on Wall Street as Federal Reserve Chair Jerome Powell warned that interest rates will remain high for longer but dismissed the prospect of a rate hike.

Powell’s comments offered some relief to markets, which had fallen sharply in recent sessions amid growing concerns over sticky inflation giving the Fed less confidence to cut interest rates. Powell signalled that the next rate move from the Fed was still likely to be an interest rate cut, although the timing of the move remained uncertain following a series of hotter-than-expected U.S. inflation readings.

Focus this week now turns to nonfarm payrolls data for April, due on Friday, which is also expected to factor into the outlook for interest rates. The first-quarter earnings season carried on, with Apple Inc set to report its earnings after the close on Thursday.