Here is what you need to know on Monday, July 31:
Markets stay relatively quiet to begin the last trading day of July. The US Dollar Index consolidates the previous week's gains above 101.50 and US stock index futures trade flat following the risk rally seen on Friday. Gross Domestic Product and Harmonized Index of Consumer Price (HICP) data from the Euro area will be watched closely as investors try to figure out whether the European Central Bank will pause the tightening cycle in September. Chicago PMI and the Federal Reserve Bank of Dallas' Texas Manufacturing Survey will be featured in the US economic docket later.
EUR/USD staged a rebound and stabilized above 1.1000 on Friday but ended up closing the week in negative territory. The pair holds steady early Monday. HICP in the Euro area is forecast rise 5.3% on a yearly basis in July, down from 5.5% in June. While speaking to French daily Le Figaro over the weekend, ECB President Christine Lagarde said that the Eurozone economy was forecast to expand 0.9% in 2023. On a quarterly basis, the Eurozone GDP is expected to expand 0.2% in Q2 following the 0.1% contraction recorded in Q1.
GBP/USD fluctuates in a tight channel above 1.2850 early Monday. Consumer Credit change data for June will be released from the UK in the European session. Later in the week, the Bank of England will announce monetary policy decisions.
Following Friday's volatile action that was fuelled by the Bank of Japan's unexpected decision to introduce flexibility into the yield curve control (YCC) strategy, USD/JPY gathered bullish momentum early Monday. At the time of press, the pair was trading at its highest level in three weeks above 142.00.
Gold gathered bullish momentum and registered strong daily gains on Friday. XAU/USD, however, finds it difficult to preserve its momentum early Friday and trades in the red slightly above $1,950 as the benchmark 10-year US Treasury bond yield edges higher toward 4%.
Bitcoin continues to move up and down in a very narrow range at around $29,500 on Monday and Ethereum stays flat slightly below $1,900.
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