The FX universe traded in a flattish mood on Tuesday, while investors remained mainly focused on the timing of Fed rate cuts. Next of note will be the release of UK inflation data ahead of the BoE gathering, while flash PMIs will close the week.
Here is what you need to know on Thursday, June 20:
The USD Index (DXY) ended the session barely changed amidst reduced activity in response to the Juneteenth Day holiday. The weekly Mortgage Applications by MBA are due on June 20, seconded by Building Permits, Housing Starts, the Philly Fed Manufacturing Index, the usual Initial Jobless Claims, and the speech by the Fed’s Barkin.
EUR/USD advanced marginally and managed to retest the 1.0750 zone amidst the irresolute price action in the US Dollar. On June 20, the European Commission will release its advanced gauge of Consumer Confidence.
GBP/USD edged further up and kept the optimism well in place following the UK CPI results and ahead of Thursday’s BoE event. The BoE is expected to keep its policy rate unchanged on June 20.
USD/JPY rose for the fifth session in a row, although it failed to retest or surpass the 158.00 barrier. The weekly Foreign Bond Investment figures are expected on June 20.
AUD/USD picked up extra pace and added to Tuesday’s gains, re-shifting its attention to the 0.6700 hurdle. In Oz, the next release of note will be the flash Judo Bank Manufacturing and Services PMIs on June 20.
Prices of WTI reached a new high past the $81.00 mark per barrel, although that initial move fizzled out afterwards, leaving the commodity slightly on the defensive for the day.
Prices of Gold navigated a narrow range around $2,330 per troy ounce amidst the Dollar’s inconclusive session and the inactivity in the US money markets. Silver, instead, climbed to five-day highs and approached the key $30.00 mark per ounce.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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