Here’s what you need to know for July 20:
During the Asian session, the data for the Australian labor market and the Japanese trade balance for June will be published.
In the US session, markets reacted positively to the UK Consumer Price Index, which was below consensus, awaiting a series of tech sector earnings to be released after the session.
The UK core CPI fell for the first time since January, from 7.1% yoy to 6.9% yoy, and services inflation fell from 7.4% yoy to 7.2% yoy. However, wage growth is accelerating, which will make it more difficult for the Bank of England (BoE) to reduce inflation. However, both core and headline inflation disappointed expectations and markets lowered hopes that the Bank of England will raise 50 basis points next month. Consequently, the GBP/USD continued its slide and went from a high of 1.3041 to a low of 1.2867.
This boosted the US dollar. The US Dollar Index, DXY, recorded a high of 100.535 and from a low of 99.925. Likewise, the weakness of the yen on Wednesday was positive for the US dollar.
The USD/JPY pair advanced 0.62% on Wednesday. The yen came under pressure on Wednesday after Bank of Japan Governor Ueda suggested there will be a continuation of the BOJ’s easy monetary policy until there is a change in its assessment to meet its inflation target. Stocks rose, reducing the attractiveness of the Yen and its safe-haven demand.
As for the Euro, the DXY rally was painful for the bulls. The further drop in the 10-year German bund yield to 3-week lows weakened Euro interest rate differentials and the EUR/USD pair ended the day considerably lower, hitting a low of 1.1174.
However, the decline in global government bond yields on Wednesday was a bullish factor for precious metals, with gold shining at times in a volatile US session. However, the yellow metal ended the day range-bound and flat near $1,977 from within the balance of the lows of $1,969.81 and $1,9870.99. Meanwhile, there has been data showing a sell-off in Gold funds weighing on prices as values in Gold ETFs fell to a 4-month low on Tuesday. Bitcoin is up $1.81.47 today or 0.61% at $2.9976.42. Crude oil and gasoline prices on Wednesday settled mixed, giving back earlier gains.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
