- US Dollar Index stays above 98 handle ahead of FOMC.
- Investors ignore latest headlines surrounding US-China trade talks.
- Trading action is likely to remain subdued for next few hours.
After losing 40 pips on a daily basis, the USD/JPY pair seems to be having a difficult time staging a meaningful recovery as investors stay on the sidelines ahead of the highly-anticipated FOMC announcements. As of writing, the pair was posting modest daily losses at 108.55.
Following the first day of high-level US-China trade negotiations in China, the editor-in-chief of Chinese and English editions of the Global Times, Hu Xijin, reported that negotiators had an efficient and constructive deep exchange while adding that two sides discussed increasing purchase of US farm products and the US side agreed to create favourable conditions for it. These comments, however, failed to ramp up the risk appetite and allowed the pair to stay in its range. Reflecting the neutral market sentiment, the 10-year US Treasury bond yield is down 0.4% on the day while the S&P 500 Futures is adding 0.15%.
Volatility to pick up in the second half of the day
Later in the day, the ADP's private-sector employment data will be released. However, markets are likely to stay calm while waiting for the FOMC. At the moment, the US Dollar Index is virtually flat on the day at 98.08.
Previewing these events, "Given crosscurrents persist as a threat for the outlook and inflation remains subdued, we look for the Fed to leave the door open to further easing. We expect the statement to show modest, mark-to-market changes and for two of the FOMC voters to dissent,” said TD Securities analysts.
“Separately, we'll also have the first look at employment data for July, with the release of the ADP jobs report (mkt: 150k); and further indication of manufacturing activity for July with the Chicago PMI (mkt: 51.0).”
Technical levels to consider
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds gains above 1.0700, as key US data loom
EUR/USD holds gains above 1.0700 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
GBP/USD extends recovery above 1.2500, awaits US GDP data
GBP/USD is catching a fresh bid wave, rising above 1.2500 in European trading on Thursday. The US Dollar resumes its corrective downside, as traders resort to repositioning ahead of the high-impact US advance GDP data for the first quarter.
Gold price edges higher amid weaker USD and softer risk tone, focus remains on US GDP
Gold price (XAU/USD) attracts some dip-buying in the vicinity of the $2,300 mark on Thursday and for now, seems to have snapped a three-day losing streak, though the upside potential seems limited.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.