This is what you need to know to trade today Wednesday July 27:
The Dollar Index (DXY) seems to have entered a consolidation phase after Tuesday’s decisive rebound. DXY is trading in a tight range near 107.00 in European morning trading after gaining 0.7% on Tuesday. Investors remain on the sidelines waiting for the Federal Reserve to announce its policy decisions. US stock index futures are trading in positive territory early in the European session, pointing to an improving market sentiment. Also to be released on the US economic docket are June Durable Goods Orders, Pending Home Sales and Goods Trade Balance data.
Fed Preview: Powell Will Jumpstart Dollar Recovery With Promise To Crush Inflation, Whatever It Takes
The risk-off environment in the markets buoyed the dollar on Tuesday. The Kremlin said on Tuesday that Nord Stream’s gas supply capacity to Europe would be reduced to 20% from Wednesday because one of the gas turbines had not yet arrived after maintenance in Canada and another was faulty. Meanwhile, the city of Wuhan has shut down public transport and ordered businesses closed to curb the spread of the coronavirus. Municipal authorities also decided to ban large gatherings in Wuhan’s Jiangxia district, home to nearly a million people.
The Fed is expected to raise its interest rate by 75 basis points (bps) throughout the day. Investors will be looking for new clues on the September rate decision. Currently, CME Group’s Fed Watch tool shows that markets are pricing in a 50% chance that the Fed will go for a 50 basis point hike in September.
Fed Outlook: Dollar’s Fate Depends on Powell’s Policy Guidance
The EUR/USD lost more than 100 points and fell back towards 1.0100 on Tuesday. The pair remains relatively calm, holding on to modest recovery gains near 1.0130 early on Wednesday. The European Central Bank will release private lending data for June during the European session. On the other hand, the German Sentix Investor Confidence for the month of August fell to new record lows at -30.6.
The GBP/USD still moving sideways above 1.2000. Sterling remains firm against the dollar as market participants anticipate a 50bp rate hike from the Bank of England in August.
The AUD/USD it dipped towards 0.6900 during Asian trading hours on Wednesday. Data from Australia showed the Consumer Price Index (CPI) rose to 6.1% year over year in the second quarter, up from 5.1% in the first quarter. However, this reading was slightly below market expectations, which were 6.2%.
After suffering heavy losses in the second half of the previous week, the USD/JPY closed the first two days of the week in positive territory and recovered above 137.00.
The Prayed it is having a hard time making a decisive move in either direction and is moving up and down in a tight channel around $1,720. The 10-year US Treasury yield remains calm around 2.8%, providing no directional clue to XAU/USD.
The Bitcoin He posts small daily losses, but manages to stay afloat above $21,000 early on Wednesday. ethereum It is trading unchanged on the day near $1,500.
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
