Forex Today: Markets’ attention will be on the BoE meeting

Pablo Piovano FXStreet

The US Dollar (USD) resumed its downward trend and tumbled to multi-day lows on Wednesday, as investors remained watchful of President Trump’s plans for Chief Powell’s replacement as well as any developments on the trade front ahead of the upcoming deadline. On the central bank’s galaxy, both the Bank of England and Banxico are expected to lower their policy rates by 25 basis points.

Here's what to watch on Thursday, August 7:

The US Dollar Index (DXY) reversed two consecutive daily pullbacks and eased to the 98.10 zone, or multi-day troughs, challenging its interim 55-day SMA at the same time. The weekly Initial Jobless Claims are due, seconded by Wholesale Inventories, flash Q2 Unit Labor Costs, and the New York Fed’s Consumer Inflation Expectations. In addition, the Fed’s Bostic and Musalem are due to speak.

EUR/USD rose to weekly peaks well north of the 1.1600 barrier in response to the pickup in the selling pressure on the Greenback. Germany’s Balance of Trade results will be in the spotlight.

GBP/USD extended its march north, reaching five-day tops around 1.3370 ahead of the BoE’s interest rate decision. The Halifax House Prices Index is next on tap, followed by the BoE’s DMP survey.

USD/JPY faded Tuesday’s bullish attempt and refocused on the downside amid the marked pullback in the US Dollar. The weekly Foreign Bond Investment figures will be released, followed by the advanced Coincident Index and Leading Economic Index.

AUD/USD traded in an inconclusive fashion south of the 0.6500 hurdle, adding to Monday’s vacillating tone. The Balance of Trade results will be published on the Australian docket, ahead of the final Building Permits and Private House Approvals readings. Additionally, the RBA’s Connolly will speak.

Following Trump's threats to India and the deadline for Russia, WTI prices retreated for the fifth consecutive day on Wednesday, breaking below the $64.00 mark per barrel for the first time since early June.

Gold left behind a multi-day positive streak and approached the $3,360 mark per troy ounce on the back of rising US yields and speculation surrounding Trump’s candidates to succeed Chief Powell. Silver prices alternated gains with losses just below the $38.00 mark per ounce.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD struggles near 0.7150 as Fed hike bets and Middle East risks underpin USD

AUD/USD kicks off the new week on a weak note and hovers near Friday's low, around mid-0.7100s, as the US Dollar holds up on rising Fed rate-hike bets, bolstered by the US CPI. Furthermore, escalating Middle East tensions and clashes in the Strait of Hormuz underpin the safe-haven USD. However, hawkish RBA expectations could help limit deeper losses for the Aussie.

USD/JPY holds steady near mid-153.00s as traders await Fed/BoJ rate decisions

USD/JPY consolidates near a seven-month low touched last Tuesday as traders move to the sidelines ahead of the FOMC decision on Wednesday and the BoJ policy update on Friday. Meanwhile, a more hawkish repricing of the BoJ's normalization path supports the Japanese Yen, while rising Fed rate-hike bets and geopolitical risks underpin the US Dollar, leading to the pair's subdued price action at the start of the new week.

Gold consolidates above $4,300 as traders await Fed rate decision this week

Gold struggles to capitalize on Friday's modest bounce from sub-$4,300 levels and kicks off the new week on a subdued note as traders move to the sidelines ahead of a slew of central bank events. Meanwhile, the latest US inflation figures reaffirmed September Fed rate-hike bets and cap the non-yielding bullion. Moreover, escalating US-Iran tensions act as a tailwind for the safe-haven US Dollar, keeping XAU/USD bulls on the back foot.

Week ahead: Fed, BoJ and BoE decide amid inflation dilemma

A crucial central bank week looms for markets as both the Federal Reserve and Bank of Japan are under pressure from all sides, with their credibility at stake. The Bank of England looks set to have an easier ride, at least for now, while inflation releases will be watched too as war continues to rage in the Middle East.

CFTC Report: Japanese Yen reversal leads a broader positioning reset

The week in one sentence: Yen positioning swung back into net longs in the week to September 8, leading to a 103.0K-contract improvement. Canadian Dollar shorts also fell sharply, while Oil buying accompanied another price rise. Euro, Sterling and Swiss Franc positioning weakened despite firmer currencies, leaving those moves unconfirmed by speculative flows.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.