Dollar Maintains High Ground Against Most Currencies Ahead of FOMC Minutes, Oil and Gold Cool Down

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This is what you need to know to trade today Wednesday July 7:

Markets have stabilized and the dollar holds its gains after weak US data and ahead of the FOMC meeting minutes. Oil and gold are pulling back from their highs despite bullish factors, while cryptocurrencies are on the rise. The focus is also on the US JOLTS job vacancies, the EU economic forecasts and the news about the covid.

The American dollar refuses to back down despite a substantial drop in bond yields. 10-year Treasury yields fell about 1.36% after the ISM Services PMI Purchasing Managers Index fell to 60.1 in June, significantly more than expected. The only exception is USD / JPY, which moved lower.

Concerns about the health of the US economy they only temporarily replaced the upbeat sentiment following Friday’s NFP nonfarm payroll report. The focus is now on the minutes of the June Federal Reserve meeting. At that point, the Fed made a substantial change amid a booming economy and signs of persistent inflation. The document may paint a more nuanced picture than the positive dollar narrative that emerged from the event three weeks ago.

The EUR/USD it is trading lower after disappointing German industrial production fell 0.3%, worse than expected. The mixed figures of the German institution ZEW weigh on the common currency. Wednesday focuses on the updated economic forecasts from the European Commission. An upward update is likely, despite the spread of the Delta variant of the coronavirus.

The meeting of strategic review of the European Central Bank is underway, with possible changes to the inflation target of the Frankfurt-based institution, among others.

See: Preview of the ECB’s Strategic Review: Three Potential EUR / USD Catalysts to Watch

The GBP/USD It has been struggling with 1.38 despite the British government’s insistence to remove nearly all covid-related restrictions on July 19. A pessimistic Bank of England and the acrimony of Brexit are weighing on the British pound.

Lower Treasury yields have kept gold above $ 1,800, but the upward movement stopped a bit. XAU / USD hit a high of $ 1,814 on Tuesday.

The raw WTI it is trading around $ 73, below the highs. Earlier this week, a dispute between Saudi Arabia and the United Arab Emirates ended in a collapse of the OPEC + talks. Therefore, the group will refrain from increasing its production. USD / CAD is trading above 1.24 amid the oil move and ahead of the release of Canada’s Ivey PMI.

Cryptocurrencies they have been rising, although in tighter ranges. Bitcoin is hovering around $ 35,000 and Ethereum is marching towards $ 2,400. Shiba Inu has promising potential.


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