This is what you need to know to trade today Thursday, August 4:
While FOMC officials balked at the market view that the Fed might start to cut interest rates in the second half of the day, the dollar remained strong against its rivals on Wednesday. Market action remains relatively subdued in early morning Europe as investors expect the Bank of England (BoE) announce its monetary policy decision. Later on the US economic docket, initial jobless claims and merchandise trade balance data for June will be released. Meanwhile, US stock index futures are trading flat on the day, pointing to a cautious sentiment.
See: BoE decision preview: Bailey will follow in Powell’s footsteps with bearish hike
Richmond Fed President Tomas Barking said Wednesday that recession fears were slightly inconsistent with a monthly employment growth of almost 400,000 positions and an unemployment rate of 3.6%. St. Louis Fed President James Bullard reiterated that would like the interest rate to move towards 3.75-4% this year. Lastly, San Francisco Fed President May Daly argued that markets are getting ahead of themselves by expecting rate cuts next year.
The BoE is expected to raise its interest rate by 50 basis points, up to 1.75%, after its monetary policy meeting. FXStreet analyst Yohay Elam says that “BoE is expected to raise rates by 50 basis points on ‘Super Thursday’, but it is also likely to paint a gloomy picture that will dampen expectations about the path of further hikes.” “This complex event has several twists but will most likely hurt the British pound.”
See: Bank of England Preview: Bailey will hit pound with bearish rally
Meanwhile, the Organization of Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, have agreed increase oil production by 100,000 barrels per day in September.
The pair EUR/USD Posts modest daily gains on Thursday but remains below 1.0200. Early in the day, the data from Germany showed factory orders down 0.4% month on month in June and fell by 9% year-on-year.
The GBP/USD recovers slightly and trades above 1.2150 after closing the previous two days in negative territory.
The USD/JPY It retains its bullish momentum early on Thursday and trades above 134.00. “Investors should start bracing for a return to normal in Japanese bond trading as the central bank will stop buying debt one dayJapan’s Finance Minister Michio Sato said earlier in the day, but these comments did not help the JPY find demand.
After Tuesday’s sharp drop, the Prayed managed to regain traction and posted modest gains on Wednesday. XAU/USD continues to rise and is now in positive territory above $1,770.
The Bitcoin continued to decline for the sixth day in a row on Wednesday and appears to have stabilized around $23,000 in early trading. The ethereum it continues to fluctuate in a relatively tight channel near $1,600.
Source: Fx Street
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