Here is what you need to know on Wednesday, July 31st:
- All eyes are on the Federal Reserve. The world's most powerful central bank is set to cut interest rates for the first time in over a decade. The move will likely be a one-off amid lower inflation and trade tensions and not the beginning of a long cycle of rate cuts as most data points have been upbeat. Fed Chair Jerome Powell's message on future moves will determine the next moves. President Donald Trump has repeated his calls for the Fed to enact a massive rate cut.
- The latest data has been mixed with the Core PCE – the Fed's preferred inflation gauge – missed with 1.6% YoY while the CB Consumer Confidence beat with 135.7 points. The ADP Non-Farm Payrolls will likely shake markets ahead of the Fed, serving as a hint toward the official NFP on Friday.
- US-Sino trade talks continue in Shanghai on the background of Trump's comments that "China is ripping us" and his boasts that the world's second-largest economy has lost millions of jobs due to tariffs.
- EUR/USD has advanced despite a small miss on German HICP inflation. Today we will learn about euro-zone inflation in July and GDP in the second quarter. Both are expected to decline in comparison to June.
- GBP/USD has been stabilizing above 1.2100 after tumbling down some 250 pips in two days. PM Boris Johns has maintained his tough rhetoric and told the EU the ball is in their court regarding the Brexit accord. Johnson wants to renegotiate the controversial Irish backstop and the EU refuses.
- Australian second-quarter inflation came out at 0.6% on the headline and 0.4% on the core, an increase in comparison to the first quarter and supporting the Aussie improving its position.
- The Canadian dollar is holding its ground as oil prices edge up and ahead of Canada's GDP report for May.
- Cryptocurrencies are moving higher, but Bitcoin remains below $10,000 after the US Senate held a hearing on blockchain technology.
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 holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.