18/07/2023
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Today’s News
EURUSD CONTINUES GROWING AND RENEWS ITS HIGH
EURUSD rose for the eighth consecutive trading session even though U.S. macroeconomic data came out better than expected. Although the New York Empire State Manufacturing Index showed an increase in business activity, the data didn't support the U.S. dollar. The market still expects the European Central Bank's monetary policy (ECB) to be more hawkish than the Federal Reserve's (Fed).
'I think the dollar can stay under selling pressure. Markets are focused on the end of the FOMC tightening cycle,' said the currency strategist at Commonwealth Bank of Australia, Carol Kong. According to Reuters, the market has priced in a 25-basis-point rate hike from the Fed at the policy meeting next week but anticipates rate cuts in December. As for the ECB, investors expect the regulator to continue monetary policy tightening.
EURUSD continued to rise during the Asian session but failed to hold above 1.12700. Traders should watch for the U.S. Retail Sales report at 12:30 p.m. UTC. Lower-than-expected figures may push EURUSD higher, while higher-than-anticipated numbers may bring the pair below 1.12000.
XAUUSD
Yesterday, the gold price dropped below 1,950 but then recovered and finished the day nearly unchanged. Meanwhile, XAUUSD was relatively stable on Monday as there were still doubts on whether the Federal Reserve (Fed) will announce an end to its hawkish monetary policy.
'Gold investors at this point are quite reluctant to go fully bullish despite last week's inflation data,' said the head of commodity strategies at TD Securities Bart Melek. Indeed, consumer prices have moderated, but the U.S. job market remains strong.
For example, yesterday's New York Empire State Manufacturing Index came out better than expected, indicating a tight labour market. According to Reuters, traders expect the Fed to hike the base rate at the 25–26 July meeting, and it's unclear when the Central Bank will start cutting the rate.
Finally, from our currencies watch report On Monday, the Russian rouble (RUB) was the best-performing currency among the 20 global currencies we tracked, while the Turkish lira (TRY) showed the weakest results. The Canadian dollar (CAD) was the leader among majors, while the New Zealand dollar (NZD) underperformed.
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