What to watch for on Thursday, July 21:
It was a busy and worrying Wednesday, but the currency board did not reflect it, as the European Central Bank’s monetary policy announcement made investors cautious.
Inflation is one of the key themes globally, with the UK consumer price index rising 9.4% year-on-year in June, while the Canadian CPI rose 8.1% in the same period, both above May figures.
In the UK, the Conservative leadership contest has narrowed the candidates down to two finals, Rishi Sunak and Liz Truss. One of them will become the next Prime Minister to replace Boris Johnson. The winner will be announced on Monday, September 5, after a postal vote by 160,000 Tory party members.
Wall Street opened with modest gains, but US indices turned lower on news that big companies are cutting jobs. The first was Google, which announced it would suspend hiring for two weeks, while Ford later unveiled plans to cut up to 8,000 jobs in the coming weeks. Headlines put recession concerns back on the table.
In Italy, Prime Minister Mario Draghi won a no-confidence vote, but with three major cotillion parties boycotting the vote, he is likely to resign and call a snap election. In addition, the EU authorities fear a total cut off of Russian gas, which will take a heavy toll on the Union’s Gross Domestic Product.
Meanwhile, Russia has announced that the geographical objectives of the special operation in Ukraine have changed to add new territories.
EUR/USD is trading around 1.0170, while GBP/USD has again been unable to retain gains above the 1.2000 threshold and is hovering around the 1.1960 price zone. AUD/USD is slightly lower, holding below 0.6900, while USD/CAD consolidates around 1.2870.
The US dollar posted modest gains against the Swiss franc and the yen. Gold, meanwhile, fell to a new weekly low below $1,700 and is now trading in the $1,697 area.
The price of oil fell slightly, and WTI is now trading at $99.80 a barrel.
Source: Fx Street
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