Here is what you need to know on Friday, July 23:
The market mood is calm after three consecutive positive days and despite growing covid concerns. The safe-haven dollar is down, except against the euro, which is pressured after the dovish ECB meeting. Gold and oil are edging higher. Preliminary PMIs are eyed.
US shares have been stabilizing after three consecutive days of gains, compensating for Monday's sell-off. Tech company earnings have contributed to the upbeat mood while growing worries of the Delta COVID-19 variant have been brushed aside.
Coronavirus: America's CDC issued a stark warning about the spread of the highly transmissible strain and German Chancellor Angela Merkel also expressed concern. Italy followed France by requiring vaccine passports for certain activities and the opening ceremony for Tokyo's Olympic Games will be held with few spectators.
The US dollar is on the back foot, trading in tandem with falling 10-year Treasury yields, which have failed to recapture the 1.30% level. Lower returns on US debt also support gold, which is holding above $1,800.
EUR/USD stands out by trading close to the three-month lows. The European Central Bank enhanced its forward guidance regarding raising rates, conditioning any more by forecasting a 2% annual increase in prices in the middle and toward the end of its policy horizon of three years. The bank also wants to see core inflation rise and would allow a temporary overshoot.
ECB Analysis: Three dovish changes hit EUR/USD, more could be in store
GBP/USD is holding onto gains above 1.3750 after UK Retail Sales exceeded estimates, rising by 0.5% in June. The British government has eased self-isolation rules following the country's "pingdemic" – hundreds of thousands are called to quarantine every day, causing disruptions to the economy. The UK and the EU remain at Woods over the Northern Irish protocol, which London wants to rewrite and Brussels refuses to.
Markit's preliminary Purchasing Managers' Indexes for July are being released on Friday, with economists expecting the figures to edge off the highs. Worries about the virus, supply-chain issues and staff shortages may push PMIs lower.
US Markit PMIs Preview: Pre-weekend dollar boost? Downbeat figures could exacerbate risk-off mood
Cryptocurrencies have been extending their recovery, with Bitcoin flirting with $33,000 and Ethereum advancing toward $2,100. WTI Crude Oil is hovering around $71, up from the low levels seen early in the week.
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 fluctuates near 1.0700 after US data
EUR/USD stays in a consolidation phase at around 1.0700 in the American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold stays in consolidation above $2,300
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.