Forex Today: US Dollar selloff pauses ahead of US data, tariff headlines

Here is what you need to know on Tuesday, June 3:

Following the risk-averse action that weighed on the US Dollar (USD) at the beginning of the week, markets stabilize early Tuesday. The European economic calendar will feature preliminary inflation data for May and investors will pay close attention to the JOLTS Job Openings data from the US in the second half of the day. Several Federal Reserve (Fed) policymakers will also be delivering speeches during the American trading hours.

Safe-haven flows dominated the financial markets on Monday as investors grew pessimistic about the United States (US) and China reaching a trade agreement. In the late American session, citing a draft letter addressed to the US' negotiating partners, Reuters reported that US President Donald Trump's administration is asking countries to deliver their best trade offers by Wednesday. Additionally, a White House spokesperson said that President Trump and Chinese President Xi Jinping were planning to meet later this week. These headlines helped the risk mood improve toward the end of the day and allowed the USD to find a foothold. Early Tuesday, the USD Index clings to small daily gains at around 99.00, while US stock index futures trade marginally lower.

In the minutes of its May policy meeting, the Reserve Bank of Australia (RBA) noted that it was not yet time to move the monetary policy toward an expansionary setting. Meanwhile, RBA Assistant Governor Sarah Hunter warned early Tuesday that higher US tariffs will put a drag on the global economy. After rising about 1% on Monday, AUD/USD stays under bearish pressure and loses more than 0.5% on the day near 0.6450.

Gold benefited from the risk-averse market atmosphere on Monday and climbed to its highest level since early May above $3,390. XAU/USD corrects lower early Tuesday but manages to hold slightly above $3,350.

EUR/USD edges lower following Monday's rally but stays above 1.1400. Annual inflation in the Eurozone, as measured by the change in the Harmonized Index of Consumer Prices, is forecast to soften to 2% in May from 2.2% in April. Eurostat will also publish the Unemployment Rate data for April.

GBP/USD stays in a consolidation phase above 1.3500 after closing decisively higher on Monday.

Bank of Japan (BoJ) Governor Kazuo Ueda said on Tuesday that the Japanese economy is recovering modestly, despite showing some signs of weakness. USD/JPY clings to small gains near 143.00 in the European morning on Tuesday after closing in negative territory for three consecutive days.