What you need to know on Wednesday, July 14:
The dollar is nearing its monthly high against most major rivals, driven by upwardly revised US inflation. The Consumer Price Index was revised up in June to 5.4% year-on-year, well above the 4.9% expected. The underlying reading was also revised up from 3.8% to 4.5%. Germany also released its June inflation figures, with the annual consumer price index confirmed at 2.3%. The figures reignited speculation about tighter monetary policy, despite policymakers working hard to cool those expectations.
The EUR / USD pair hit a fresh multi-month low of 1.1780, holding close ahead of the Asian open, usually a sign of further declines to come. GBP / USD is hovering around 1.3820, while AUD / USD is approaching this 2021 low of 0.7409.
The loonie fell despite the rise in oil prices. WTI moved above $ 75.00 a barrel amid speculation of a tighter supply, as OPEC + cannot agree on higher production and expectations of a further reduction in US inventories.
Gold prices were quite volatile after the release of US inflation figures, but the shiny metal is ending the day virtually unchanged at around $ 1,808 a troy ounce.
Wall Street struggled to post some gains, with US indices ending up mixed around their opening levels. On the other hand, government bond yields resumed their advance, with the yield on the 10-year US Treasury bond touching 1.42%.
The focus shifts to the Chairman of the Federal Reserve of the United States, Jerome Powell, who will testify on the Semi-Annual Monetary Policy Report before the House Financial Services Committee and try to convince congressmen of the need to maintain the facilities despite economic progress. Your prepared comments have already been posted and the event will likely have a limited impact on the markets.
The delta variant of the coronavirus is dominant in the Northern Hemisphere and the number of new cases is increasing in the US and Europe. Fears of delaying the economic return weigh on investor sentiment.
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