Here is what you need to know on Wednesday, July 24:
Following the choppy action seen on Monday and Tuesday, the market volatility could heighten on key macroeconomic events midweek. S&P Global will release preliminary July Manufacturing and Services PMI data for Germany, the Eurozone, the UK and the US on Wednesday. During the American trading hours, the Bank of Canada (BoC) will announce monetary policy decisions. The US economic calendar will also feature Goods Trade Balance and Wholesale Inventories for June.
US Dollar PRICE This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.35% | 0.23% | -1.82% | 0.57% | 1.34% | 1.46% | 0.37% | |
| EUR | -0.35% | -0.14% | -2.20% | 0.16% | 1.03% | 1.04% | -0.07% | |
| GBP | -0.23% | 0.14% | -2.15% | 0.29% | 1.16% | 1.16% | 0.05% | |
| JPY | 1.82% | 2.20% | 2.15% | 2.45% | 3.29% | 3.29% | 2.13% | |
| CAD | -0.57% | -0.16% | -0.29% | -2.45% | 0.87% | 0.89% | -0.22% | |
| AUD | -1.34% | -1.03% | -1.16% | -3.29% | -0.87% | 0.01% | -1.11% | |
| NZD | -1.46% | -1.04% | -1.16% | -3.29% | -0.89% | -0.01% | -1.07% | |
| CHF | -0.37% | 0.07% | -0.05% | -2.13% | 0.22% | 1.11% | 1.07% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The US Dollar (USD) benefited from the negative shift seen in risk sentiment and gathered strength against its major rivals on Tuesday, with the USD Index registering its highest daily close in nearly two weeks at around 104.50. Early Wednesday, the USD Index stays in a consolidation phase, while US stock index futures lose between 0.4% and 0.9%. In the meantime, the benchmark 10-year US Treasury bond yield holds comfortably above 4.2% after closing virtually unchanged on Tuesday.
The BoC is widely expected to cut the policy rate by 25 basis points to 4.5%. Following the announcement of the rate decision at 13:45 GMT, BoC Governor Tiff Macklem will speak on the policy outlook at a press conference and respond to questions from the press. USD/CAD registered gains for the fifth consecutive trading day on Tuesday and continued to stretch higher early Wednesday. At the time of press, the pair was trading at its highest level since mid-April near 1.3800.
After failing to reclaim 1.0900, EUR/USD came under bearish pressure on Tuesday and closed the day deep in negative territory. The pair stays on the back foot in the European morning on Wednesday and trades below 1.0850.
Although GBP/USD managed to erase a portion of its losses after dipping below 1.2900 on Tuesday, it failed to gather recovery momentum. The pair remains under modest bearish pressure below 1.2900 at the beginning of the European session.
During the Asian trading hours, the data from Australia showed that the Judo Bank Composite PMI edged lower to 50.2 in July's flash estimate from 50.7 in June. AUD/USD extended its downtrend early Wednesday and dropped below 0.6600 for the first time in over a month.
USD/JPY continued to push lower despite the renewed USD strength on Tuesday and lost nearly 1% on the day. The bearish pressure surrounding the pair remains intact early Wednesday. At the time of press, USD/JPY was trading at its lowest level since mid-May near 154.50, falling more than 0.5%.
After suffering heavy losses on Monday, Gold regained its traction and closed above $2,400 on Tuesday. XAU/USD holds its ground early Wednesday and edges higher toward $2,420.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays defensive near 1.0500 amid French political jitters
EUR/USD is battling 1.0500 in the European session on Wednesday. The pair trades with caution amid renewed US Dollar buying and French political uncertainty as the government faces a no-confidence vote in a busy day ahead. Markets await US data, Fed Chairman Powell's speech.
GBP/USD struggles to reclaim 1.2700 ahead of US data, Powell
GBP/USD fluctuates in a tight channel below 1.2700 on Wednesday. The pair reverses dovish BoE Governor Bailey's remarks-led drop as traders reposition ahead of US ADP Jobs data, ISM Services PMI report and Fed Chair Powell's speech.
Gold price treads water near $2,640, Fed Chair Powell's speech eyed
Gold price attracts some sellers following an intraday uptick to the $2,650 supply zone in the early European session on Wednesday. The precious metal, however, remains confined in a familiar range held over the past week or so as traders seem reluctant to place aggressive directional bets ahead of Fed Chair Jerome Powell's speech.
ADP report expected to show US private sector job growth cooled in November
The ADP Employment Change report is seen showing a deceleration of job creation in the US private sector in November. The ADP report could anticipate the more relevant Nonfarm Payrolls report on Friday.
The fall of Barnier’s government would be bad news for the French economy
This French political stand-off is just one more negative for the euro. With the eurozone economy facing the threat of tariffs in 2025 and the region lacking any prospect of cohesive fiscal support, the potential fall of the French government merely adds to views that the ECB will have to do the heavy lifting in 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.