This is what you need to know to trade today Monday June 20:
The markets have started the new week with a cautious tone while investors await speeches from central bankers. The US dollar DXY index, which managed to post modest gains last week, is tilting lower at the start of the European session on Monday. The President of the European Central Bank (ECB), Christine Lagarde, will testify before the Committee on Economic and Monetary Affairs of the European Parliament at 13:00 GMT. Although the US stock and bond markets will remain closed for the June 19 holiday. St. Louis Fed President James Bullard is scheduled to speak later in the day.
The DXY index is down almost 0.3% at the start of the European morning, trading around 104.40. Over the weekend, the Governor of the Federal Reserve, Christopher Waller, signaled that he would support a rate hike of 75 basis points in July if the inflation data is in line with his expectations. For her part, the president of the Federal Reserve Bank of Cleveland, Loretta Mester, stated that it would take two years for inflation to reach the 2% target again set by the Fed.
In the early hours of the Asian session on Monday, The People’s Bank of China (PBoC) has announced that it is leaving the prime rate on 5-year loans unchanged at 4.45%. Furthermore, it has been reported that The US is reviewing tariffs on Chinese imports and is also considering a pause in the federal gas tax to lower prices.
After Friday’s decline, the EUR/USD it ended the previous week virtually unchanged. In the early hours of the European session on Monday, the pair rises modestly and trades around 1.0530. The members of the Governing Council of the ECB, Joachim Nagel and Fabio Panetta, will speak later. Meanwhile, data from Germany has shown that the producer price index Annual PPI in May was 33.6%compared to the market expectation of 33.5%.
The GBP/USD it fluctuates in a tight range above 1.2200 on Monday. British Treasury Secretary Simon Clarke said on Monday that don’t expect a recession in the UK and added that the long-term outlook for the economy was “really positive.” However, these comments have not helped the British pound.
Prompted by the inaction of the Bank of Japan, the USD/JPY posted impressive gains on Friday before entering a consolidation phase below 135.00 early on Monday. On Monday, the Bank of Japan announced that it was offering buy unlimited amounts of 5 and 10 year Japanese government bonds (JGB).
The Prayed lost its traction on Friday amid the rally in US Treasury yields and erased part of its weekly gains. XAU/USD is trading in a tight range above $1,840 on Monday.
The Bitcoin extended his fall and fell below $20,000 for the first time since December 2020 during the weekend. BTC/USD ended up losing more than 20% on a weekly basis and is now trading close to $20,000. The ethereum rallied modestly after dipping below the key $1,000 level on Saturday, but failed to gather more momentum. At time of writing, ETH/USD is down 4% on the day, trading at $1,080.
Source: Fx Street
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