Forex Today: Dollar demand on hold amid a US holiday

Valeria Bednarik FXStreet

What you need to know on Tuesday, July 6:

The week started in slow motion amid a holiday in the US that kept local markets closed. The greenback held around Friday’s lows against most major rivals, but near multi-month highs. Further declines seem unclear.

UK Prime Minister Boris Johnson announced all restrictive measures would be lifted on July 19, including the use of masks and social distancing rules. He also noted that people will no longer be instructed to work from home, despite surging coronavirus cases. A final decision will be made on July 12. The country reported an increase in hospitalizations in the last 48 hours, although the levels are still far below the peaks from last year.

Markit final versions of its Services PMIs for the EU indicated substantial growth in June. US data will be out on Tuesday.

Crude oil prices soared as the OPEC+ meeting was postponed once again. Pretty much that confirms that members are unable to agree on an increase in oil output. WTI trades at $76.30 a barrel.

Gold futures were up, with the bright metal currently at $1,791 a troy ounce.

Wall Street futures edged lower, although there were no fireworks in stocks markets.

Concerns about the Delta variant spreading in Europe and the US had a limited impact on currencies. However, the pandemic continues to take its toll on economic progress worldwide. A new strain coming from California, now named Epsilon, seems to be resilient to vaccines and may become a risk-off catalyst.

The focus now shifts to the Reserve Bank of Australia monetary policy decision and Governor Philip Lowe press conference.

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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 looks sidelined around 1.1850

EUR/USD remains on the back foot, extending its bearish tone and sliding towards the 1.1850 area to print fresh daily lows on Monday. The move lower comes as the US Dollar gathers modest traction, with thin liquidity and subdued volatility amplifying price swings amid the US market holiday.

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.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

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.