What you need to take care of on Tuesday, July 19:
The dollar spent most of the first day of the week on the back foot, losing ground against most of its major rivals. However, it bounced back in the US afternoon, as Wall Street was unable to retain its early gains and turned red.
The greenback began easing on Friday as US encouraging data temporarily cooled recession-related concerns. A scarce macroeconomic calendar on Monday kept it on the downside ahead of central banks' decision. The US Federal Reserve entered its blackout period ahead of next week's meeting, while the European Central Bank will announce its monetary policy next Thursday.
The energy crisis in Europe could be a game changer in EUR/USD, which recovered up to 1.0200. The Russian Gazprom company has declared force majeure on supplies and said it could not guarantee gas supplies to Europe because of "extraordinary" circumstances. The International Energy Agency has warned the EU must reduce gas consumption ahead of the winter. The pair currently trades at around 1.0150.
A softer dollar helped GBP/USD to reach 1.2039, but the pair retreated towards the current 1.1960 area amid a worsening mood at the end of the day.
Commodity-linked currencies hold on to most of their early gains, with AUD/USD trading at 0.6815 and USD/CAD at 1.2965. Finally, safe-haven JPY and CHF posted modest gains against the USD.
Gold aimed to recover some ground, but ended the day at around $1,708 a troy ounce and is at risk of falling further. Crude oil prices, on the other hand, retain most of their early gains, with WTI now trading at $98.80 a barrel.
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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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