Forex Today: Markets turn risk-averse ahead of US data

Eren Sengezer FXStreet

Here is what you need to know on Thursday, July 20:

There is a negative shift in risk mood on Thursday with US stock index futures trading in negative territory. Escalating China-US tensions and the poor performance of technology stocks following uninspiring earnings weigh on market sentiment. In the second half of the day, weekly Initial Jobless Claims, June Existing Home Sales and the Federal Reserve Bank of Philadelphia's Manufacturing Survey for July will be featured in the US economic docket. The European Commission will release the July Consumer Confidence Index.

China's ambassador to Washington, Xie Feng, noted late Wednesday China will respond if the US were to impose more curbs on the country's chip sector. "The Chinese government cannot simply sit idly by. There's a Chinese saying that we will not make provocations, but we will not flinch from provocations," Feng said, as reported by Reuters. The Shanghai Composite Index fell nearly 1% on Thursday and the Nasdaq Futures were last seen losing nearly 1% on the day.

Ahead of the US data releases, the US Dollar Index consolidates Wednesday gains above 100.00 and the benchmark 10-year US Treasury bond yield stays in positive territory at around 3.8%.

In the Asian session on Thursday, the People's Bank of China announced that it left the one-year and five-year Loan Prime Rates unchanged at 3.55% and 4.20%, respectively. Meanwhile, the data from Australia revealed that the Unemployment Rate held steady at 3.5% while Employment Change arrived at +32,600, higher than the market expectation of 15,000. In response, AUD/USD gathered bullish momentum and climbed above 0.6800.

EUR/USD closed in negative territory on Wednesday but managed to rise above 1.1200 early Thursday.

Following Wednesday's sharp decline that was triggered by soft inflation data from the UK, GBP/USD finds it difficult to stage a rebound and stays in the red slightly above 1.2900 early Thursday.

USD/JPY extended its weekly uptrend but lost its momentum after testing 140.00 on Wednesday. The pair stays relatively quiet at around 139.50 in the European session.

Gold price touched its highest level in three months at $1,987 early Thursday. With the 10-year US yield turning north, XAU/USD retreated to the $1,980 area.

Bitcoin failed to make a decisive move in either direction on Wednesday but advanced beyond $30,000 early Thursday. Ethereum gained traction and climbed above $1,900 after having closed the sixth straight day in negative territory on Wednesday.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD treads water above 1.1850 amid thin trading

EUR/USD stays defensive but holds 1.1850 amid quiet markets in the European hours on Monday. The US Dollar is struggling for direction due to thin liquidity conditions as US markets are closed in observance of Presidents' Day.

GBP/USD flat lines as traders await key UK and US macro data

GBP/USD kicks off a new week on a subdued note and oscillates in a narrow range near 1.365 in Monday's European trading. The mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold sticks to intraday losses; lacks follow-through

Gold remains depressed through the early European session on Monday, though it has managed to rebound from the daily trough and currently trades around the $5,000 psychological mark. Moreover, a combination of supporting factors warrants some caution for aggressive bearish traders, and before positioning for deeper losses.

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.

Monero Price Forecast: XMR risks a drop below $300 under mounting bearish pressure

Monero (XMR) starts the week under pressure, recording a 4% decline at press time on Monday after a 7% drop the previous day, putting the $300 support zone in focus.