The market mood is moderately risk-off, but that has not stopped the dollar’s decline. Fears of bumps in the recovery are weighing on sentiment ahead of the Fed’s minutes. Cryptocurrencies have tumbled while oil is pressured.

US stocks failed to hold onto their gains on Tuesday as fears of inflation and rising interest rates took hold of the conversation once again, a day after officials at the Federal Reserve managed to calm investors with a dovish message. The focus now shifts to the FOMC Meeting Minutes from the April meeting.

The dollar is on the back foot despite a moderate increase in US Treasury yields. Returns on 10-year bonds have risen to around 1.645%. Gold is hovering above $1,870, around the highs. 

EUR/USD is trading above 1.22, also buoyed by looser restrictions in the old continent. Parisian terraces will reopen following a fall in COVID-19 cases. Final eurozone inflatino figures are set to confirm the increase of 1.6% in the headline Consumer Price Index in April.

CPI came out at 1.5% in the UK, as expected, allowing GBP/USD to consolidate its gains around 1.42. Andrew Bailey, Governor of the Bank of England, indicated on Tuesday that negative interest rates are off the agenda for now. 

Canada reports inflation figures later on, yet the focus for USD/CAD has been the fall in oil prices, triggered by speculation that Iran may ship its crude to international markets. A Russian diplomat in Vienna implied that nuclear talks were nearing an agreement. The report was later denied. 

Cryptocurrencies suffered an extended downfall after the People’s Bank of China reiterated that digital tokens cannot be used as a means of payment. The blow from Beijing joins Tesla’s abandonment of the granddaddy of cryptocurrencies. Bitcoin tumbled below $39,000, Ethereum is under $3,000, XRP below $1.45 and also Doge, Elon Musk’s favorite, is in the red.