Here is what you need to know on Friday, July 9:
The dollar has resumed its gains, this time as yields reverse course and rise. Concerns about the Delta covid variant weigh on some markets. Oil, gold and Bitcoin trade off the highs. Canada's jobs report and speeches from the ECB's Lagarde and the BOE's Bailey are eyed.
US bond yields have reversed course and risen above 1.33% after several days of fast declines that perplexed traders. The increase supports the greenback across the board, including against the euro, which stood out with gains against the greenback on Thursday.
EUR/USD is trading under 1.1850 after advancing to higher ground amid the European Central Bank's announcement of a strategic review. The Frankfurt-based institution now targets a symmetric 2% target rather than a ceiling. Investors had priced in that dovish change and seemed to buy the euro in response to a lack of other substantial moves.
The ECB continues targeting headline inflation rather than core prices. President Christine Lagarde will speak again on Friday.
See ECB Strategy Change Analysis: Lagarde lags behind dovish Fed, EUR/USD has room to rise
GBP/USD is trading below 1.38 as COVID-19 cases continue rising, topping 32,000 in Thursday's report. The rapid spread of the Delta variant threatens to derail Britain's report due on July 19. The EU and the UK are at loggerheads over a new Brexit issue – Britain's divorce bill. A difference of around €6 billion is still to be settled.
Sterling is also pressured by downbeat Gross Domestic Product figures for May, which showed an increase of only 0.8%, roughly half the early expectations. Bank of England Andrew Bailey is scheduled to speak later in the day and may shed light on the BOE's plans.
The spread of coronavirus has also been weighing on Asian stocks, as Delta hits countries such as Indonesia and Malaysia hard. Japan announced that the Olympic Games will be held without spectators.
China reported that inflation has slowed down to 1.1% YoY in June, weaker than expected. Producer prices rose by 8.8% last month, an elevated level but below the highs. The figures add to a picture of a cooldown.
US stock markets declined on Thursday amid the jitters in bond markets and worries about the spread of Delta in America. Despite having an abundance of vaccine doses, many in the world's largest economy have yet to get the jab.
See Delta Doom is set to storm America, the dollar could emerge as top dog
Canada releases its jobs report for June, and after two months of sharp declines, a substantial increase of over 170,000 positions is expected. USD/CAD is trading at around 1.25, chopping around in response to fluctuating petrol prices. WTI Crude Oil is trading around $73, off the lows it hit in response to speculation that the UAE would ramp up output.
See Canadian Jobs Preview: USD/CAD set to fall amid summer hiring boom?
Bitcoin is hovering around $33,000, extending its gradual decline. Ethereum is holding above $2,100.
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
AUD/USD: Extra gains in the pipeline above 0.6520
AUD/USD partially reversed Tuesday’s strong pullback and regained the 0.6500 barrier and beyond in response to the sharp post-FOMC pullback in the Greenback on Wednesday.
EUR/USD meets support around 1.0650
EUR/USD managed to surpass the key 1.0700 barrier in response to the intense retracement in the US Dollar in the wake of the Fed’s interest rate decision and Chair Powell’s press conference.
Gold surpasses $2,300 as Dollar tumbles
The precious metal maintains its constructive stance and trespasses the $2,300 region on Wednesday after the Federal Reserve left its FFTR intact, matching market expectations.
Bitcoin price reclaims $59K as Fed leaves rates unchanged
The market was at the edge of its seat on Wednesday to see whether the US Federal Reserve (Fed) would cut interest rates during the Federal Open Market Committee (FOMC) meeting.
The market welcomes the Fed's statement
The market has welcomed the Fed statement, and the S&P 500 is higher in its aftermath, the dollar is lower and Treasury yields are falling. There is still only one cut priced in by the Fed.