Forex Today: Commodity currencies rally against dollar, ISM Services PMI in focus

Yohay Elam FXStreet

Here is what you need to know on Tuesday, July 6:

The US dollar remains on the back foot as Americans return from a long weekend and ahead of the ISM Services PMI. The Aussie lags the kiwi amid a mixed RBA decision and oil is climbing after OPEC's failure. The UK reopening is criticized for supporting the pound and EUR/USD traders eye German data.

Dollar weakness: Returns on 10-year US Treasury yields are at 1.44%, off their lows, yet the greenback has been extending its Nonfarm Payrolls-induced drop. One of the winners has been gold, whose price surpassed $1,800.

Equity markets are quiet, with S&P 500 futures stabilizing ahead of the resumption of trade after the long Independence Day weekend. American shares hit record highs last week.

ISM's Services Purchasing Manages' Index for June is in the spotlight on Tuesday. The headline is projected to retreat from 64 points in May but continues reflecting robust growth. Investors will eye inflation expectations, as represented by the Prices Paid component.

ISM Services PMI Preview: Why the inflation component could trigger a dollar rebound

The Reserve Bank of Australia left its policy unchanged and signaled it would continue buying bonds beyond September, albeit at a slower pace. AUD/USD advanced ahead of the publication and has been extending its gains, nearing 0.76. However, it lags behind NZD/USD, which took advantage of USD weakness and hit 0.71, an increase of over 1%.

OPEC+ members ended their protracted meeting without an agreement, thus leaving crude output unchanged. Markets watchers expected an increase of 400-500 thousand barrels per day. WTI Crude has resumed its upswing, nearing $77. The Canadian dollar is also benefiting.

Britain reopening: UK Prime Minister Boris Johnson announced the removal of all restrictions on July 19, despite an increase of COVID-19 cases associated with the Delta variant. GBP/USD is trading close to 1.39 and Markit's Construction PMI is of interest.

EUR/USD is trading close to 1.19 despite worries about the spread of the Delta strain in the old continent and a drop of 3.7% in German Factory Orders. The ZEW Economic Sentiment figure is awaited.

Cryptocurrencies are moving up on Tuesday after dropping on Monday. Bitcoin is recovering toward $35,000 and Etehreum is hovering above $2,300.

More: Shiba Inu price consolidates to continue its 38% advance

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Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.