Here is what you need to know on Friday, July 29:
The dollar selloff continues early Friday with the US Dollar Index falling to its weakest level since early July below 106.00. The positive shift witnessed in market mood despite the disappointing macroeconomic data releases from the US caused the greenback to continue to lose interest. The European economic docket will feature second-quarter Gross Domestic Product for the euro area alongside the preliminary Harmonised Index of Consumer Prices (HICP) data for July. Ahead of the weekend, the US Bureau of Economic Analysis (BEA) will release the Personal Consumption Expenditures (PCE) Price Index data, the Federal Reserve's preferred gauge of inflation.
On Thursday, the advance estimate of the BEA revealed that the US economy contracted at an annualized rate of 0.9% in the second quarter. According to the CME Group FedWatch Tool, the probability of a 75 basis points rate hike in September fell toward 20% after this data, putting additional weight on the dollar's shoulders. Meanwhile, the sharp upsurge witnessed in Wall Street's main indexes on the back of upbeat earnings figures allowed risk flows to continue to dominate the financial markets. Early Friday, US stock index futures are up between 0.3% and 1.4%.
After having dropped toward 1.0100 during the European trading hours on Thursday, EUR/USD managed to stage a rebound and closed the day little changed near 1.0200. In the early European morning, the pair posts small daily gains above 1.0200. Commenting on the policy outlook, European Central Bank (ECB) Governing Council member Ignazio Visco said on Thursday that they don't have to worry about the exchange rate for the time being, making it difficult for the shared currency to outperform its rivals. The euro area economy is expected to grow by 0.2% on a quarterly basis in the second quarter. The HICP is forecast to remain unchanged at 8.6%.
GBP/USD continues to push higher toward 1.2200 on Friday and trades at its highest level in a month. The Bank of England (BOE) will release the Consumer Credit data for June in the European session.
USD/JPY lost more than 200 pips on Thursday and is already down 100 pips on Friday, trading below 133.00. The sharp decline witnessed in US Treasury bond yields seems to be weighing heavily on the pair. The benchmark 10-year US Treasury bond yield, which fell nearly 4% on Thursday, was down 0.75% at 2.66% at the time of press.
Gold continues to push higher on Friday and trades at its highest level in three weeks above $1,760. Falling yields and the broad-based dollar weakness fuel XAU/USD's rally.
Bitcoin took advantage of the improving market mood and gained nearly 4% on Thursday before going into a consolidation phase near $24,000. Ethereum rose more than 5% on Thursday and trades flat above $1,700 in the European morning.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Ethena Labs launches new UStb stablecoin backed by BlackRock's BUIDL token
Ethena Labs announced on Thursday that it has released a new stablecoin product, UStb. The new stablecoin will be fully collateralized by BlackRock's USD Institutional Digital Liquidity Fund and function similarly to a traditional stablecoin.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.