This is what you need to know to trade today Tuesday July 5th:
Following the three-day weekend in the US, the dollar began to gain strength against its rivals early on Tuesday, with the DXY dollar index approaching its highest level in almost two decades, above 105.50. Factory orders data for May will be released on the US economic docket. The 10-year US Treasury bond yield is up nearly 1% in early European trading, helping the dollar find demand. Meanwhile, US stock index futures are slightly higher, pointing to a slightly upbeat mood in the market. Later, the Bank of England will report on its financial stability report.
The Wall Street Journal reported on Monday that the administration of US President Joe Biden plans to reduce some tariffs on Chinese imports in a bid to ease inflationary pressures. Meanwhile, data from China showed Caixin Services PMI rose to 54.5 in June from 41.4 in May, beating market expectations of 47.3 by a wide margin.
Earlier in the day, the Reserve Bank of Australia (RBA) announced that it had raised its interest rate by 50 basis points (bps), to 1.35% from 0.85%. This decision was in line with market expectations, but the RBA’s neutral tone on the political outlook made it difficult for the AUD/USD pair to gain any upward momentum. The RBA stated that medium-term inflation expectations remain well anchored and noted that the size and timing of future rate hikes will depend on the data. At the time of writing this report, the AUD/USD it was down 0.8% on the day and traded at 0.6810.
The EUR/USD remains under heavy bearish pressure early Tuesday and trades in negative territory below 1.0400. European Central Bank (ECB) Governing Council member Madis Muller and ECB Vice President Luis de Guindos declared on Monday that a 25 basis point rate hike in July would be appropriate. On the other hand, services PMI data from Germany and the Eurozone fell to five-month lows in June.
The GBP/USD closed the first day of the week practically unchanged, but in the European morning it changed course. The pair was last seen trading below 1.2100.
In its quarterly survey, the Bank of Canada (BOC) said that consumer inflation expectations one year ahead rose to 6.8% from 2.2%. “The survey shows that near-term inflation concerns have increased and inflation is expected to be higher for longer than in the previous survey,” the BoC said. After posting small daily losses on Monday, the pair USD/CAD it is recovering towards 1.2900 on Tuesday.
Supported by rising yields in the US, the USD/JPY rose above 136.00 on Tuesday. In the early hours of the Asian session, data from Japan showed that business activity in the services sector continued to expand apace in June, with the Jibun services PMI coming in at 54.
The Prayed failed to make a decisive move in either direction and continues to trade sideways in a tight range above $1,800 early on Tuesday.
The Bitcoin he staged a rebound on Monday and managed to recover the $20,000. ethereum It gained more than 7% on Monday and was last up 1% on the day to $1,160.
Source: Fx Street
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