Talking Points:
- Risk appetite has been boosted only slightly as a lack of concrete details emerge from the Trump-Kim summit in Singapore.
- Far more potent FX-specific catalysts like US CPI, UK CPI, and the FOMC[1] and ECB rate decisions will come across the wires in the next 48-hours.
- Retail traders[2] remain net-short the US Dollar, but have trimmed their positions further over the past week.
Looking to learn more about how central banks impact FX markets? Check out the DailyFX Trading Guides[3].
The US Dollar (via DXY[4] Index) is carving out a doji candlestick on Tuesday as price action has proven indecisive around notable developments in the news. Primarily, with the Trump-Kim denuclearization summit concluding in Singapore, traders may have been expecting a more potent reaction in the G10 FX space.
Beyond a bump in USD/JPY[5] (with the Japanese Yen[6] serving as a regional safe haven), the impact has been minimal: US equity futures are trading flat; and Gold[7] is back lower, even if only marginally.
But to a certain extent, a big market move resulting from the Trump-Kim summit would probably have been on the heels of a negative surprise out of the summit, rather than an agreeement that lacks any teeth. Instead, traders will be looking to the slate of upcoming economic data out of Europe and North America for far more potent catalysts over the coming 48-hours.
Attention is quickly shifting to the Federal Reserve's June policy meeting tomorrow, starting with today with the release of the May US CPI report. Incoming inflation data for May will show that both
