This is what you need to know to trade today Thursday July 28:
The dollar came under heavy selling pressure late on Wednesday and the Dollar Index (DXY) erased all of Tuesday’s gains. DXY remains lower and trades below 106.50 early on Thursday as investors reassess the Fed’s policy outlook. Later in the session, the US Bureau of Economic Analysis will release its first estimate of second-quarter Gross Domestic Product (GDP) growth. German inflation figures and eurozone business sentiment will be published on the European agenda.
The Fed announced on Wednesday that it had raised the interest rate by 75 basis points, to the range of 2.25-2.5%. During the press conference, Chairman Jerome Powell said that from now on they will not give any guidance on rates. As for the outlook for monetary policy, “our thinking is that we want to get to a moderately restrictive level by the end of this year,” Powell said. “That means between 3% and 3.5%.”
US GDP Advance: Sure Dollar Gain? Economy flirts with recession to boost USD
The Nasdaq Composite Index gained more than 4% on Wednesday and the SP500 Index rallied 2.6%. However, US stock index futures are trading in negative territory in the European morning, suggesting that investors are turning cautious ahead of the US GDP data.
US Gross Domestic Product Forecast: Will the US Avoid a Technical Recession?
The EUR/USD rose to a daily high of 1.0235 early in the European session on Thursday. However, the observed negative shift in risk sentiment helped the dollar limit its losses, with the pair retreating below 1.0200.
The GBP/USD it jumped to its highest level in four weeks at 1.2188 but entered a consolidation phase early on Thursday. The pair is trading in a relatively tight channel above 1.2170 in European morning trading.
The Prayed took advantage of falling yields on Wednesday and advanced to a fresh two-week high above $1,740. The 10-year US Treasury yield is up 1% so far on Thursday, keeping XAU/USD from gaining further upside momentum.
The USD/JPY closed in negative territory on Wednesday and continues to push lower towards 135.50 on Thursday. On Friday, the Tokyo CPI, industrial production and unemployment data from Japan will be closely watched by market participants.
The Bitcoin gained 8% on Wednesday but lost its momentum near $23,000. ethereum it reached its highest level since June 10, at $1,676, before falling back towards $1,600.
Source: Fx Street
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