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Federal Reserve Bank of New York President John Williams said on Wednesday that he wants to avoid inflation becoming highly persistent because that could become permanent.Key quotesImportant that inflation expectations are well anchored.Want to avoid inflation becoming highly persistent because that could become permanent.Way to avoid that is to respond relatively strongly when inflation begins to deviate from the target.Misperceptions about ‘r star’ can lead to long-lasting deviations.We have to be very aware that inflation expectations could shift in any way that could be detrimental.You want the whole curve of inflation expectations to be well-behaved.It’s not to say inflation expectations shouldn’t…

Philip Lane, the chief economist of the European Central Bank, indicated that although the majority of factors suggested a continued decline in euro area inflation, there were also concerns, such as the possibility of unsuccessful EU-US trade negotiations, that could lead to an increase in inflation.He stated in an interview with Germany’s Frankfurter Allgemeine newspaper that they needed to find a middle path when questioned about the implications for interest rate policy.Lane added that they would respond with further interest rate cuts if they saw signs of further falling inflation. However, it was noted that the scope of the discussion…

Durable Goods Orders in the US declined less than expected in April.The US Dollar Index stays in positive territory above 99.00.Durable Goods Orders in the United States (US) declined by 6.3%, or $19.9 billion, in April to $296.3 billion, the US Census Bureau reported on Tuesday. This reading followed a 7.6% increase (revised from 9.2%) reported in March and came in slightly better than the market expectation for a decrease of 7.9%.”Excluding transportation, new orders increased 0.2%,” the press release read. “Excluding defense, new orders decreased 7.5%. Transportation equipment, also down following four consecutive monthly increases, drove the decrease, $20.3…

The Indian rupee and its regional peers weakened on Tuesday as the greenback rose against major peers and Asian equities declined, with rupee traders also pointing to month-end dollar payments from importers that weighed on the local unit. The rupee closed at 85.33 against the U.S. dollar, down 0.3% on the day. The South Asian currency has experienced choppy moves over recent trading sessions, quickly reversing course from a fall past 86 last week to touch a two-week high of 84.78 on Monday and then shedding those gains in the face of a firmer dollar.The rupee’s very-near-tenor implied volatility -…

The Euro extends its rebound from 161.00 to levels above 163.00.The Yen is losing ground alongside a sharp decline in super long-term Japanese yields.ECB’s Lagarde affirmed the Euro’s position as a viable alternative to the US Dollar. The Euro is trading higher for the second consecutive day, still fuelled by the delay of Trump’s deadline to avoid 50% tariffs in the US, while the Yen declines alongside super long-term Japanese yields.The pair extended its rebound from last week’s lows, at 161.00, to levels above 163.00 and is aiming for the 163.45 area, favoured by broad-based Yen weakness.Japan is considering reducing…

The rupee declined 19 paise to 85.29 against the US dollar in early trade on Tuesday amid waning foreign fund inflow and subdued domestic equity market sentiment. Forex traders said though receding crude oil prices supported the local unit, investors stayed cautious ahead of the release of industrial and manufacturing production data for April as well as the first quarter GDP growth numbers, scheduled later this week. At the interbank foreign exchange, the domestic unit opened at 85.15 and declined further to 85.29 against the greenback in initial deals, registering a loss of 19 paise over its previous close. The…

The Australian Dollar holds losses below a level after pulling back from a six-month high of 0.6537.China Industrial Profits increased 3% YoY in April 2025, following a previous growth rate of 2.6%.The US Dollar struggles over fiscal deficit concerns as Trump’s tax bill is set to be voted on in the Senate.The Australian Dollar (AUD) remains subdued against the US Dollar (USD) for the second successive day on Tuesday. However, the AUD/USD pair maintains its position near a psychological 0.6500 level after pulling back from a six-month high of 0.6537, which was reached on Monday. However, the continued decline in…

Bank of Japan Governor Kazuo Ueda said on Tuesday that while the Japanese central bank are now closer to the inflation target than any time during the last few decades, the BoJ is not quite there.Key quotesWhile many of my G7 colleagues looked relieved by the progress made in the fight against inflation, they also acknowledged new challenges such as heightened trade policy uncertainty and dealing with more frequent supply-side shocks.In Japan, we are still grappling with the longstanding challenge of achieving our 2% inflation target in a sustainable manner.While we are now closer to our inflation target than at any…

USD/JPY remains capped below former psychological support, now resistance, at 144.00.BoJ Governor Ueda to address “New Challenges for Monetary Policy” conference on Tuesday, with markets watching for policy clues.The US Dollar remains vulnerable as potential hawkish signals from the BoJ could drive renewed Yen strength.USD/JPY is attempting a mild recovery after last week’s sell-off in the United States (US) bond market dragged the pair below the key psychological level of 144.00. The move lower was driven by rising US Treasury yields and a broader risk-off tone. With the pair now trading below 143.00 at the time of writing, attention shifts to…

The Mexican Peso keeps firm against the USD Dollar, marking a fresh year-to-date high.US markets remain closed for Memorial Day, with low liquidity expected throughout the day.USD/MXN faces renewed pressure, testing 19.20 as focus shifts to Friday’s US PCE print.The Mexican Peso (MXN)  is experiencing a steady appreciation against the US Dollar (USD) on Monday, reflecting lingering uncertainty in the United States (US) economic outlook amid concerns about US President Donald Trump’s tariff threats and the country’s fiscal outlook.With US markets closed for Memorial Day on Monday, the Mexican Peso remains resilient, with the USD/MXN pair trading at around 19.19,…