This is what you need to know to operate today Tuesday, July 1:
Investors will be attentive to the comments during the Central Banks Forum organized by the European Central Bank (ECB) in Sintra, Portugal. The president of the Federal Reserve, Jerome Powell, the president of the ECB, Christine Lagarde, the governor of the Bank of England, Andrew Bailey, and the governor of the Bank of Japan, Kazuo Ueda, will participate in a panel of the event later in the day.
US dollar price this week
The lower table shows the percentage of the US dollar change (USD) compared to the main currencies this week. The US dollar was the weakest currency against the Swiss Franco.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.46% | -0.32% | -0.73% | -0.65% | -0.73% | -0.89% | -0.92% | |
| EUR | 0.46% | 0.10% | -0.25% | -0.19% | -0.29% | -0.42% | -0.48% | |
| GBP | 0.32% | -0.10% | -0.55% | -0.30% | -0.39% | -0.54% | -0.58% | |
| JPY | 0.73% | 0.25% | 0.55% | 0.07% | 0.05% | -0.12% | -0.15% | |
| CAD | 0.65% | 0.19% | 0.30% | -0.07% | -0.13% | -0.24% | -0.28% | |
| Aud | 0.73% | 0.29% | 0.39% | -0.05% | 0.13% | -0.15% | -0.19% | |
| NZD | 0.89% | 0.42% | 0.54% | 0.12% | 0.24% | 0.15% | -0.04% | |
| CHF | 0.92% | 0.48% | 0.58% | 0.15% | 0.28% | 0.19% | 0.04% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the US dollar of the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box will represent the USD (base)/JPY (quotation).
After a quiet European session, the US Dollar (USD) He was under sale in the American session on Monday and the USD index lost around 0.5%. The White House Secretary, Karoline Leavitt, told journalists on Monday that US President Donald Trump sent a note written to the president of the Fed, Powell, urging him to lower interest rates. He added that Trump believes that interest rates should be reduced to around 1%.
On Tuesday, the US Economic Calendar will present the Jolts Employment Offers data for May and the Supply Management Institute (ISM) will publish the Purchasing Management Management Index (PMI) manufacturing managers for June. In the European session, the USD index struggles to gain traction and remains in negative terrain around 96.70. Meanwhile, the futures of US stock indexes lose between 0.1% and 0.2%, reflecting a caution posture of the market.
He EUR/USD It benefited from the generalized sales pressure surrounding the USD and rose above 1,1800 for the first time since September 2021. The torque corrected down in the European morning and negotiates about 1,1780. Eurostat will publish the preliminary June data of the Harmonized Consumer Price Index (HICP) for the Eurozone.
The governor of the BOE, Bailey, reiterated on Tuesday that the path of interest rates will continue to be gradually down. He added that the labor market is softening, but noted that they must very carefully observe the consequences of inflation. After these comments, the GBP/USD It clings to modest daily advances around 1,3750.
After registering small losses on Monday, the USD/JPY Accumulates bassist momentum and loses around 0.5% below 143.50 in the European morning on Tuesday.
China’s data showed that the Caixin manufacturing PMI improved 50.4 in June from 48.3 in May. This reading was better than the market expectation of 49. After climbing almost 0.8% on Monday, the AUD/USD It continues to spread and negotiates in a new maximum of 2025 about 0.6600.
He Gold It extends its rebound from minimum of several weeks and earns more than 1% in the day, quoting around $ 3,350.
FAQS Central Banks
Central banks have a key mandate that consists in guaranteeing the stability of prices in a country or region. Economies constantly face inflation or deflation when the prices of certain goods and services fluctuate. A constant rise in the prices of the same goods means inflation, a constant decrease in the prices of the same goods means deflation. It is the Central Bank’s task to keep the demand online by adjusting its interest rate. For larger central banks, such as the US Federal Reserve (FED), the European Central Bank (ECB) or the Bank of England (BOE), the mandate is to maintain inflation about 2%.
A central bank has an important tool to raise or lower inflation: modify its reference interest rate. In precommunicated moments, the Central Bank will issue a statement with its reference interest rate and give additional reasons of why it maintains or modifies it (cut it or the SUBE). Local banks will adjust their savings and loan rates accordingly, which in turn will make it difficult or facilitate that citizens obtain profits from their savings or that companies ask for loans and invest in their businesses. When the Central Bank substantially rises interest rates, there is talk of monetary hardening. When it reduces its reference rate, it is called monetary relaxation.
A central bank is usually politically independent. The members of the Central Bank Policy Council go through a series of panels and hearings before being appointed for a position in the Policy Council. Each member of that council usually has a certain conviction on how the Central Bank should control inflation and the consequent monetary policy. Members who want a very flexible monetary policy, with low types and cheap loans, to substantially boost the economy, while comprising with inflation slightly greater than 2%, are called “pigeons.” Members who prefer higher types to reward savings and want to control inflation at all times are called “hawks” and will not rest until inflation is located at 2% or just below.
Normally, there is a president who directs each meeting, has to create a consensus between the hawks or the pigeons and has the last word when the votes must be divided to avoid a draw to 50 on whether the current policy must be adjusted. The president will pronounce speeches, which can often be followed live, in which he will communicate the current monetary position and perspectives. A central bank will try to boost its monetary policy without causing violent oscillations of the fees, the actions or their currency. All members of the Central Bank will channel their position towards the markets before a monetary policy meeting. A few days before a monetary policy meeting is held and until the new policy has been communicated, the members are prohibited from speaking publicly. It is what is called a period of silence.
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.
