Calm ahead of the ECB storm

What you need to take care of on Thursday, June 9:

Trading was choppy across the FX board, with most major pairs holding on to familiar levels, except for the USD/JPY pair, which surged to a fresh 20-year high of 134.47. The imbalance between the US Federal Reserve and the Bank of Japan boosted the pair as the BOJ reaffirmed its decision to maintain the ultra-loose monetary policy.

The American dollar suffered early in the US session as government bond yields eased, later recovering some ground amid falling US equities. Wall Street accelerated its decline in the final hours of trading after White House spokeswoman Karine Jean-Pierre said they expect the inflation numbers to be released at the end of the week to be elevated.

The EUR/USD pair trades around 1.0710, while GBP/USD stands at 1.2540. The best performer was the Canadian dollar, as crude oil prices soared. The USD/CAD pair trades at around 1.2550 as WTI surged beyond $122.00 a barrel. AUD/USD gave up and settled just below 0.7200.

Gold advanced for a second consecutive day, but gains were tepid. The bright metal is currently changing hands at $1,853 a troy ounce.

On Thursday, the focus will be on the European Central Bank. The ECB is set to announce the end of its stimulus program and keep key rates unchanged while hinting at a July lift-off, actually two steps behind most major central banks. European policymakers have been hinting at a 50 bps rate hike, but President Christine Lagarde inclines for a conservative 25 bps hike. Markets are choppy ahead of the event and ahead of fresh US inflation figures.

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