The OPEC meeting and the US Nonfarm Payrolls rocked the market last week. The market is torn between optimism about the global economic recovery and concerns about the new coronavirus strains.
Greenback inches up ahead of inflation data
On Tuesday, the evergreen buck managed to ascend versus a basket of other leading currencies. It’s because market participants looked ahead to American inflation data later in the day that could potentially provide insights into the tempo of rate lifts by the US major financial institution in 2018.
The US dollar index, valuing the greenback’s strength versus a bunch of six leading currencies, rallied 0.19% reaching 90.06.
The Labor Department is expected to issue American CPI data this day that is believed to officially confirm that inflation is still moderate despite the labor market keeps tightening.
A higher reading could drive hopes that the Federal Reserve could have interest rates lifted four times in 2018 versus previously expected three times. The vast majority of market participants hope a rate lift would take place at the Fed approaching policy gathering
The previous week’s data pointing to a slowdown in wage surge in February notwithstanding firm jobs growth had tamed hopes that the American key financial institution might project four rate lifts for 2018 rather than three.
Meanwhile, the common currency went down, with EUR/USD heading south 0.11% showing a result of 1.2325.
The US currency gained ground versus the Japanese yen. As a result, USD/JPY rallied 0.5% being worth 106.94, adding from an overnight minimum of 106.25.
The Japanese yen had initially tacked on overnight amid a soaring cronyism scandal closely connected with the Japanese prime minister as well as his wife reportedly having to do with the sale of public land. As usual, the safe haven yen is prone to soaring in times of market instability.
The British pound went down versus the evergreen buck, with GBP/USD descending 0.08% hitting 1.3894.
As for the Australian dollar, it slumped, with AUD/USD diving to 0.7866. The currency pair NZD/USD gained 0.38% demonstrating 0.7323.
All eyes are turning to the Federal Reserve and the US dollar. How to trade XAU/USD, EUR/USD, and GBP/USD?
The main bank of Russian will likely turn hawkish today. Time to sell USD/RUB?
The overall market sentiment is risk-on. The S&P 500 index (US 500) is getting close to the all-time high. Oil is recovering quickly from its recent losses.
What will happen? The FOMC statement will be published at 21:00 MT (GMT+3) on Wednesday, July 28…
PMI reports from the EU, the UK, and the USA will be released during the day!