Forex Today: Wall Street saved the day
|What you need to take care of on Thursday, August 4:
Tensions eased a bit on Wednesday, pushing the greenback down across the FX board ahead of the US opening. The dollar, however, recovered its poise after the release of an upbeat ISM Services PMI, which indicated that the local economy remains resilient.
US indexes surged, capping the safe-haven dollar’s demand, partially helped by solid earnings reports and encouraging local data.
Meanwhile, different US Federal Reserve officials reinforce the market’s speculation the Fed is far from done with aggressive tightening, putting a 75 bps rate hike back on the table for September.
Recession fears maintain the US Treasury yield curve inverted, and the difference between the 2-year note and the 10-year note yields has widened to 36 bps. Nevertheless, Wall Street managed to post solid gains, helped by another batch of solid earnings reports.
The EUR/USD pair trades around 1.0160, as tepid European data undermined demand for the shared currency. The GBP/USD pair finished the day in the red at 1.2145.
Commodity-linked currencies, on the other hand, benefited from Wall Street’s strength. AUD/USD trades around 0.6950 while USD/CAD is marginally lower at 1.2840.
Gold price settled at $1,765 a troy ounce, while crude oil prices edged lower, as different OPEC+ sources suggest that they won’t increase output. Also, US weekly data showed slowing demand. WTI ended the day at $90.90 a barrel.
The Bank of England will announce its monetary policy decision on Thursday.
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