The U.S. dollar strengthened notably on Wednesday, supported primarily by month-end rebalancing flows, despite weaker-than-expected U.S. GDP (-0.3%) and soft ADP employment figures (62,000 jobs added). President Trump's optimistic comments on trade with China and easing auto tariffs provided further support, while geopolitical tensions added to the dollar's haven appeal. Treasury yields were mixed; short-term yields fell alongside oil prices, which declined over 3%.

Euro Pressured Amid Structural Concerns

EUR/USD slipped approximately 0.30% despite stronger eurozone GDP data, as softer inflation and a sharp rise in German unemployment highlighted ongoing vulnerabilities. Concerns around a potential head-and-shoulders technical pattern increased caution, keeping EUR/USD above key support at 1.12. Reports that the EU is preparing a contingency plan if U.S.-Ukraine peace talks stall further dampened sentiment.

Sterling Retreats on Soft Housing Data

GBP/USD fell around 0.47% due to profit-taking and weaker-than-expected UK housing data showing declining April house prices. Cable briefly dipped below key support at its 10-day moving average (1.3337). Investors remain sensitive to BoE commentary and trade developments.

USD/JPY Stable Ahead of BOJ Decision

USD/JPY remained steady, rising modestly by 0.30% within its 142-144 range. Market participants awaited the Bank of Japan’s key policy meeting Thursday amid cautious positioning and stable volatility.

Aussie Outperforms Despite Commodities Slump

AUD/USD gained strongly by 0.34%, supported by surprisingly robust Australian CPI data, even as commodities slumped. Copper tumbled over 5% on weak Chinese economic indicators, while gold declined modestly (-0.40%), pressured by dollar strength.

Equities Weaken; Investor Caution Remains

U.S. equities eased, with the S&P 500 down 0.71%, reflecting cautious sentiment amid mixed economic signals and trade uncertainty.

Currencies at close: EUR/USD -0.30%, USD/JPY +0.30%, GBP/USD -0.47%, AUD/USD +0.34%, Dollar Index +0.22%.