Forex Today: Dollar corrects lower but remains the strongest

Valeria Bednarik FXStreet

What you need to know on Tuesday, June 22:

The dollar corrected extreme overbought conditions but remains the strongest currency across the FX board. It shed most ground during US trading hours amid solid Wall Street’s gains.

The EUR/USD pair corrected up to 1.1920, holding nearby at the end of the end. ECB’s President Christine Lagarde said that the outlook for the euro area economy is brightening as the pandemic situation improves but warned about the need to remain vigilant, adding that tightening would be premature.

The GBP/USD pair surged on the better market mood, ignoring comments from Prime Minister Boris Johnson. Johnson said that cases of the coronavirus Delta variant are still going up, adding that they need to be cautious on easing restrictions. He added that data is looking good ahead of the July 19 deadline, although noting that traveling will be “difficult.”

In the US, St. Louis Fed President James Bullard noted that they would not need the emergency policies anymore as the pandemic comes to a close, but added that low interest rates and low inflation rate era are not ending any time soon. Also, Dallas Fed President Robert Kaplan is in favor of “taking the foot off the accelerator sooner rather than later.”

AUD/USD trades around 0.7540, helped by the better performance of equities. USD/CAD shed over 100 pips on a daily basis, helped by the greenback’s corrective decline and soaring crude oil prices. WTI closed the day at $73.00 a barrel.

Gold prices posted a modest daily advance. Spot gold settled at $ 1,784 a troy ounce.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

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It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.