U.S. GDP, Unemployment Claims, Pending Home Sales

EUR/USD pulled back sharply on Wednesday, falling back to the 1.0800 level ending the session 0.46% lower.

The pair dropped sharply despite the release of a slightly hot German CPI data for May. Monthly headline CPI grew at a slower pace of 0.1% from the estimates of 0.2%. In the same period, the harmonized inflation rose by 0.2% as expected. Annual headline inflation data grew in line with estimates of 2.4%.

Today's calendar includes the Pan-European Consumer Confidence in May. After that, US quarterly GDP is expected later in the day. Market will be looking for signs of softening in the US economy as firm growth, a tight labour market, and still-high inflation figures hamper the Fed’s ability to deliver rate cuts at a pace that investors continue to look for.

Gold prices fell on Wednesday ending the session 0.91% lower, weighed chiefly by strength in the dollar and U.S. Treasury yields as traders remained on edge before key economic readings that are likely to factor into interest rates.

The yellow metal was pressured by anticipation of more U.S. economic readings in the coming days, which are likely to factor into the outlook for interest rates.

A revised reading on first-quarter gross domestic product data is due later on Thursday and is likely to show some resilience in the economy. More closely watched will be PCE price index data, due on Friday. The reading is the Fed’s preferred inflation gauge.

Oil prices eased about 1% on Wednesday on worries over weak U.S. gasoline demand and economic data that could cause the U.S. Federal Reserve to keep interest rates higher for longer.

U.S. consumer confidence unexpectedly improved in May after deteriorating for three straight months amid optimism about the labor market, but worries about inflation persisted and many households expected higher interest rates over the next year.

U.S. Crude stockpiles fell much more than expected last week, the API reported Wednesday, pointing to signs of pick up in energy demand as the summer driving season is underway. The API data also showed that gasoline stockpiles decreased by 452,000 barrels, while distillate inventories increased by 2.0M barrels.

U.S. stock index futures fell on Wednesday, extending losses on Wall Street as caution over upcoming cues on interest rates and inflation saw investors turn averse towards equity markets.

Hawkish comments from Fed officials continued to trickle in through the week, as they kept up warnings that inflation will need to fall further before any interest rate cuts. This also saw traders largely price out expectations for a cut in September.

Airline stocks declined, led by American Airlines which declined 13.5% after the company cut its second-quarter profit forecast. Moreover, After the closing bell, shares of Salesforce were down more than 15% as the company reported results and forecast second quarter revenue below estimates.