Here is what you need to know on Monday, July 3:
Following Friday's uninspiring performance, the US Dollar (USD) holds its ground against its rivals early Monday. Ahead of the ISM Manufacturing PMI report for June, The US Dollar Index clings to small daily gains above 103.00. The European economic docket will feature revisions to HCOB Manufacturing PMIs. Markets will also keep a close eye on comments from central bank officials. It's worth noting that stock and bond markets in the US will close early on Monday and remain closed on Tuesday in observance of the Independence Day holiday.
Annual inflation in the US, as measured by the change in Personal Consumption Expenditures (PCE) Price Index, fell to 3.8% in May from 4.3% in April, the US Bureau of Economic Analysis reported on Friday. In the same period, the Core PCE Price Index edged slightly lower to 4.6% from 4.7%. The initial reaction to soft inflation readings caused the USD to lose some strength ahead of the weekend.
During the Asian trading hours on Monday, June Caixin Manufacturing PMI in China came in at 50.5, down from 50.9 in May but better than analysts' forecast of 50.2. The Shanghai Composite Index remains on track to post a daily gain of more than 1% and Hong Kong's Hang Seng Index is up 2% on the day. Nevertheless, US stock index futures trade flat in the European morning.
Following Friday's rebound, EUR/USD closed the week virtually unchanged. The pair stays under modest bearish pressure early Monday and trades below 1.0900.
GBP/USD gained nearly 100 pips on Friday and ended the week near 1.2700. With the USD staying resilient on Monday, the pair fluctuates slightly below that level.
USD/JPY staged a downward correction on Friday but regained its traction at the beginning of the week. As of writing, the pair was trading in positive territory near 144.80. “Japanese companies expect consumer prices to rise an average 2.6% a year from now, lower than their 2.8% projections three months ago,” the Bank of Japan’s (BoJ) noted in its quarterly Tankan survey. Meanwhile, the headline Tankan Large Manufacturing Index improved to 5.0 in Q2 from 1.0 and surpassed analysts' forecast of 3.0.
Australian Trade Minister Don Farrell said early Monday that they will be announcing new measures to improve trade relations with China soon. AUD/USD edged higher in the Asian session but reversed its direction in the European morning. AUD/USD was last seen losing more than 0.3% on the day below 0.6650. On Tuesday, the Reserve Bank of Australia announce its interest rate decision.
Gold snapped a four-day losing streak on Friday and erased a large portion of its weekly losses. XAU/USD stays calm above $1,910 early Monday.
Bitcoin struggled to find direction over the weekend and extended its sideways grind above $30,500 early Monday. Ethereum gathered bullish momentum and reached its strongest level since May above $1,950.
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
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.