The FX universe navigated an inconclusive session on Tuesday amid growing caution ahead of the BoJ and Fed monetary policy meetings on July 31. While the Fed is expected to keep rates unchanged, Chair Powell could provide more details on a possible rate cut in September. The consensus, meanwhile, seems rather divided as far as the BoJ is concerned.
Here’s what you need to know on Wednesday, July 31:
The USD Index (DXY) gave back early gains and settled in the mid-104.00s amid further declines in US yields across the curve. The Fed meets on July 31 and is expected to keep rates unchanged. Additional releases on the US docket include weekly Mortgage Applications, Employment Cost Index, Pending Home Sales and ADP Employment Change.
EUR/USD maintained the bearish performance and briefly pierced the 1.0800 support to mark four-week lows, only to regain some footing afterwards. German Retail Sales and the labor market report will be released on July 31, followed by the preliminary inflation rate in the broader Eurozone.
GBP/USD remained well on the defensive in the lower 1.2800 zone as investors continued to price in a possible rate cut by the BoE on August 1. There are no data releases scheduled for the UK on July 31.
Renewed buying interest in the Japanese yen led USD/JPY to fade the earlier rally and refocus on the downside around the 153.30 area. The BoJ will decide on rates on July 31. Additionally, preliminary Industrial Production along with Retail Sales, Consumer Confidence and Housing Starts are expected.
AUD/USD seems to have entered a consolidation theme near 0.6530, always in the shadow of Chinese concerns and persistent weakness in the commodity space. Inflation Rate, Housing Credit, Retail Sales and RBA Monthly CPI Indicator are due on July 31.
Another negative session dragged WTI prices to fresh lows in the sub-$75.00 per barrel region as traders assessed ongoing concerns over Chinese demand.
Gold prices posted decent gains and approached the $2,400 per troy ounce mark amid unresolved price action in the US dollar and declining yields. Silver regained some composure and reversed Monday’s pessimism, reclaiming the zone beyond the $28.00 per ounce barrier.
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.
