Forex Today: Run to safety only beginning

Valeria Bednarik FXStreet

What you need to take care of on Thursday, June 23:

Fears continued to back the dollar, which ended the day with gains against most of its major rivals. The focus remained on overheating inflation and potential recessions among major economies.

German Economy Minister Robert Habeck announced the country would move to stage two of its three-stage gas plan amid reduced Russian flows. Ever since the war began in Ukraine, fuel shortages have been Europe's main concern. This particular phase does not mean state intervention, scheduled for the next one.

The EU flash S&P Global PMIs for June painted a gloomy picture as EU economic activity hit a 16-month low, reflecting a stalling of demand growth. The manufacturing PMI contracted to 52, while the services index shank to 52.8 from 56.1 in May. Australian data beat expectations while UK figures were mixed, although not much different from May ones. Finally, the US manufacturing index slowed to 52.4 in June, an almost two-year low, while the Services PMI contracted to 51.6 from 53.4 in the previous month, a five-month low. The reports fueled recession-related concerns.

FOMC Chairman Jerome Powell testified before the House Financial Services Committee on Monetary Policy and the State of the Economy. Fed's head said that a big part of inflation wouldn't be affected by the central bank's tools, although another part will be. On a positive note, he added that growth this year should still be fairly strong, but his comments clearly reflect concerns about inflation and growth, as he repeated that it would be "very challenging" to ensure a smooth landing.

Wall Street spent the day in the red but managed to post modest gains on Thursday. US Treasury yields, on the other hand, edged lower amid demand for safety.

Major pairs remained within familiar levels. The EUR/USD pair trades around 1.0530, while GBP/USD stands at around 1.2260. The AUD/USD pair struggles around 0.6900 while USD/CAD nears 1.3000. Safe-haven CHF and JPY posted modest advances against the dollar.

Gold finished the day near its weekly low, now trading at around $1,825 a troy ounce. Crude oil prices were stable, with WTI settling at $104.00 a barrel.

Like this article? Help us with some feedback by answering this survey:

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD stays weak above 0.6900 after China’s trade data

AUD/USD struggles to capitalize on the previous day’s recovery and stays defensive on the 0.6900 level following the narrowing of trade surplus in China. Increased December Fed rate hike bets allows the US Dollar to pause its decline and weigh on the pair. US CPI data is next of note for the major.

USD/JPY retakes 158.00 on weak Japanese data; focus shifts to US CPI

USD/JPY attracts some dip-buyers and retakes 158.00 in the Asian session on Tuesday as a fall in Japan’s Household Spending offsets hawkish BoJ Summary of Opinions, undermining the Japanese Yen. Moreover, Fed hike bets support the safe-haven US Dollar and the currency pair. The market focus now shifts to the release of the crucial US CPI report.

Gold sticks to modest losses amid Fed hike bets; holds above $4,100 ahead of US CPI

Gold meets fresh supply, eroding a part of the previous day's strong gains to the $4,150 resistance zone, albeit it holds above the $4,100 mark heading into the European session. Firming US Federal Reserve rate-hike expectations turn out to be a key factor driving flows away from the non-yielding bullion. Meanwhile, the US Dollar struggles to lure buyers amid mixed signals regarding the state of diplomatic talks between the US and Iran, offering some support to the commodity as traders seem hesitant ahead of US consumer inflation figures.

Bitcoin hits lowest weekly close since August as short-term holders slip into losses

Bitcoin fell below $75,000 on Tuesday, after recording its lowest weekly close since August as selling pressure pushed recent buyers into losses.

This weeks’ two big inflation reports will offer perspective

Payrolls on Friday surprised with a big gain, 165,000 new jobs rather than the 65,000 forecast. Also the unemployment rate fell from 4.2% to 4.1% although average hourly earnings are up only 0.4% ($32.75). This weeks’ two big inflation reports will offer perspective. Tomorrow it’s CPI and on Friday, which is a Friday the 13th, it’s PPI.

Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds

Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.