|

Forex Today: US Dollar neutral as Fed rate hike bets stay alive

Here is what you need to know for Wednesday, July 1:

The US Dollar Index (DXY) traded on a neutral stance near the 101.20 level on Tuesday as investors digested mixed United States (US) data and hawkish Federal Reserve (Fed) commentary. Cleveland Fed President Beth Hammack said inflation remains too high and that further rate hikes may be needed if price pressure persists.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.

USDEURGBPJPYCADAUDNZDCHF
USD0.03%0.00%0.41%-0.07%-0.48%-0.51%0.11%
EUR-0.03%-0.03%0.35%-0.15%-0.53%-0.56%0.07%
GBP-0.01%0.03%0.37%-0.12%-0.49%-0.52%0.09%
JPY-0.41%-0.35%-0.37%-0.48%-0.90%-0.89%-0.30%
CAD0.07%0.15%0.12%0.48%-0.43%-0.42%0.18%
AUD0.48%0.53%0.49%0.90%0.43%0.00%0.61%
NZD0.51%0.56%0.52%0.89%0.42%-0.00%0.59%
CHF-0.11%-0.07%-0.09%0.30%-0.18%-0.61%-0.59%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

EUR/USD fell to the 1.1420 level as investors assessed softer German inflation and stronger retail sales data. Germany’s preliminary headline inflation eased to 2.4% in June from 2.7% in May, reducing immediate pressure on the European Central Bank (ECB), while German Retail Sales rose unexpectedly by 1.1% MoM in May after falling -0.4% a month earlier.

GBP/USD was flat near 1.3255, failing to find direction after Bank of England (BoE) Governor Andrew Bailey said policymakers are in no rush to change interest rates. Bailey noted that United Kingdom (UK) inflation could still rise toward 3.2% later this year but added that tighter financial conditions give the BoE time to evaluate the pass-through of higher energy prices before deciding whether another rate hike is needed.

USD/JPY crossed a four-decade high near the 162.60 mark, with the Japanese Yen (JPY) remaining under pressure despite ongoing concerns about possible intervention from Japanese authorities.

AUD/USD traded higher near 0.6920 as the Australian Dollar (AUD) found support from the latest Reserve Bank of Australia (RBA) Meeting Minutes and stronger Chinese activity data. China’s NBS Manufacturing PMI rose to 50.3 in June, while the Non-Manufacturing PMI improved to 50.2, supporting sentiment around Australia’s China-linked economy.

West Texas Intermediate (WTI) Oil remained under pressure near the $70.10 per barrel as investors focused on easing supply risks and hopes that US-Iran talks could help stabilize the energy market. Reuters reported that Brent and WTI were on track for their steepest monthly and quarterly losses since 2020 as improved tanker movement and ceasefire hopes reduced fears of a prolonged supply shock.

Gold stayed muted near the $4,020 price region as a firmer Greenback and renewed Fed rate-hike expectations limited demand for the non-yielding metal.

Author

Agustin Wazne

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

More from Agustin Wazne
Share:

Editor's Picks

GBP/USD back to 1.3250, down modestly for the day

GBP/USD now comes under fresh downside pressure and recedes toward the mid-1.3200s on Tuesday, partially reversing the optimism seen at the beginning of the week. Meanwhile, Cable’s bearish tone follows the resumption of the upside traction in the Greenback, always amid the sharp rally in USD/JPY.

EUR/USD looks inconclusive in the low 1.1400s

EUR/USD alternates gains with losses in the 1.1420 region in the latter part of the NA session on turnaround Tuesday. The pair’s vacillating price action comes amid the lack of clear direction in the US Dollar. Meanwhile, market participants are expected to gear up for the upcoming key releases on the US docket and developments from the ECB Forum in Sintra.

Gold clings to daily gains beyond $4,000

Following multi-month lows near $3,950, Gold now manages to regain some composure and reclaim the area beyond the key $4,000 yardstick per troy ounce on Wednesday. Still, any meaningful recovery appears limited as a broadly firmer US Dollar and rising US Treasury yields weigh on the yellow metal.

Coinbase, BlackRock, Visa and Stripe support Open Standard’s OUSD stablecoin
Open Standard on Tuesday unveiled Open USD (OUSD), a dollar-pegged stablecoin designed for global payments, backed by more than 140 companies. The founding coalition spans payment networks, banks, fintech firms, technology platforms and crypto infrastructure providers, including Shopify, Google, Ripple, Solana, Coinbase, Visa, Mastercard, Stripe, BlackRock and BNY.
Why a hawkish Bank of Japan could trigger the next Bitcoin sell-off

The Japanese Yen hits a 40-year low of 162.00 against the US Dollar, raising concerns about intervention or additional rate hikes by the Bank of Japan. BoJ may sell US Treasuries to buy back Yen, potentially pushing US bond yields higher and making Bitcoin less attractive to investors.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.