Forex Today: US Dollar extends rebound ahead of key data releases

Eren Sengezer FXStreet

Here is what you need to know on Thursday, June 29:

The US Dollar (USD) stays resilient against its rivals early Thursday, with the US Dollar Index holding at two-week highs near 103.00 following Wednesday's upsurge. European Commission will publish the business and consumer sentiment data for June in the European session. Later in the day, inflation figures from Germany and the US Bureau of Labor Statistics' final revision to the first-quarter Gross Domestic Product (GDP) growth alongside the weekly Initial Jobless Claims data will be watched closely by market participants.

At a policy panel at the ECB Forum on Central Banking on Wednesday, FOMC Chairman Jerome Powell noted that they believe there is more tightening coming, driven by the strong labor market. While speaking at an event in Spain early Thursday, Powell repeated his hawkish message and reminded markets that a strong majority of policymakers expect two or more rate hikes by the end of the year. Meanwhile, the Federal Reserve's Bank Stress Test revealed that large US banks are well-positioned to weather a severe recession and continue to lend.

EUR/USD fell below 1.0900 during the Asian trading hours before staging a modest rebound. While speaking at the same panel with Powell, ECB President Chritsine Lagarde reiterated that another rate hike is very likely in July but refrained from confirming any other policy steps later in the year. In the meantime, annual Consumer Price Index in Spain rose 1.9% in June, down sharply from the 3.2% increase recorded in May.

GBP/USD lost more than 100 pips and came within a touching distance of 1.2600 on Wednesday. The pair is having a difficult time gaining direction early Thursday.

USD/JPY climbed to its highest level since November above 144.70 in the European morning on Thursday but lost more than 50 pips in a matter of minutes following that jump. As of writing, the pair was trading slightly below 144.50. In the Asian session on Friday, Tokyo Consumer Price Index, Industrial Production and Unemployment Rate data will be featured in the Japanese economic docket.

Hawkish central bank rhetoric continued to weigh on Gold price and XAU/USD fell toward $1,900, touching its lowest level since early March in the process.

Bitcoin lost 2% on Wednesday but managed to hold comfortably above $30,000. Ethereum came within a touching distance of $1,800 mid-week before recovering toward $1,850 on Thursday.

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 meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.