Forex Today: PBoC to hold, RBA to cut, and more Fedspeak

The US Dollar started the new trading week on the back foot as investors continued to digest news of Moody's credit downgrade, while the resurgence of some trade tensions also weighed on the currency.

Here's what to watch on Tuesday, May 20:

The US Dollar Index (DXY) receded to two-week lows and put the key 100.00 support to the test on the back of fresh selling pressure following agency Moody's downgrade of US credit. The API's weekly report on US crude inventories is due along with speeches by the Fed's Markin, Bostic, Collins, Musalem, and Kugler.

EUR/USD jumped to two-week tops north of the 1.1200 barrier in response to the sudden sell-off in the US Dollar. Germany's Producer Prices are next on tap, seconded by EMU's Current Account, Construction Output, the Labour Cost Index, and the European Commission's flash Consumer Confidence. In addition, the ECB's Donnery, Cipollone, and Buch are due to speak.

GBP/USD advanced markedly, surpassing the 1.3400 hurdle to hit new three-week highs following the renewed offered stance in the Greenback. The Inflation Rate data on May 21 will be the next key release on the UK docket.

USD/JPY traded in a bearish note on Monday, coming down to the 144.60 zone, where some decent support seems to have turned up. Next on tap in Japan will be the Balance of Trade results on May 21

AUD/USD reversed three consecutive daily pullbacks, reclaiming the area beyond 0.6400 and coming at shouting distance from its critical 200-day SMA. The RBA is anticipated to lower its OCR by 25 basis point.

WTI alternated gains with losses near the $62.00 mark per barrel following Moody's downgrade of US credit and concerns over the Chinese economy.

Gold picked up renewed pace and retested the $3,250 region per troy ounce on Monday, following the renewed and strong downside pressure in the Greenback. Silver prices traded with marginal losses, weighed by disheartening data from China.