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USD

The Greenback settled as the U.S. Federal Reserve's policy minutes failed to give more information on the future interest rate hikes.  The Federal Reserve's minutes on its June 13-14 policy meeting showed several Fed officials expressing worries about the downshift in inflation data even as most agreed to hike rates by a quarter point in June.

Meanwhile, Traders are looking forward to hear comments by central bankers and U.S. data for its next cues. Also, investors are awaiting the U.S. Nonfarm payrolls report, which will be released tomorrow, a higher than expected reading should be taken as bullish for the USD, while a lower as expected reading should be taken as bearish for the USD.

US ADP non-farm employment change data and the ISM non-manufacturing PMI are lined up today and another batch of strong readings could boost NFP expectations. 

  • The U.S. dollar index (DXY), which measures the Greenback against a basket of currencies, was flat at 96.237 after touching a one-week high.

EUR

The euro fell as much as 0.1% to settle at $1.1338 following its decline to a one-week trough of $1.1313 yesterday. Retail sales for the region came in line with expectations of a 0.2% gain. German factory orders, which could show a 1.9% rebound, and ECB minutes are due today. Any indication that the central bank is shifting to a less dovish stance could spur more gains for the shared currency. 

GBP

The Sterling pound steadied close to a one-week low yesterday, as the UK's services sector weakened to its lowest in four months in June.  The pound is under a bit of pressure as its services PMI came in slightly weaker than expected. The reading slipped from 53.8 to 53.4 in June, lower than the projected dip to 53.6 to reflect a slower pace of industry growth in line with the manufacturing and construction sectors. Cable fell as much 0.3% to settle at $1.29, however, it rose vs. EUR by 0.2% to settle at 87.67 pence. There are no major reports due from the UK today. 

JPY 

The yen was able to benefit from risk-off vibes in the Asian region as traders turned their attention to North Korea's nuclear missile launch test. Although the missile landed near Japanese territory, the safe-haven currency fared better than its US counterpart as the hermit nation aims to target US soil. There were no reports out of Japan then and none are due today so market sentiment could push yen pairs around. 

Gold

Gold prices held steady, after hitting an eight-week low in the previous session, with  the Federal Reserve minutes released on Wednesday showing the central bank being split on how inflation might affect the future pace of interest rate increases.

Spot gold settled at $1,226.70 per ounce at 04:21 GMT. Meanwhile, U.S. gold futures for August delivery rose as much as 0.4% to settle at $1,226.40. Traders are awaiting the U.S. Nonfarm payrolls report, which will be released this Friday. Such report could influence the pace of rate rises as higher interest rates tend to support the Greenback and edged bond yields up, putting pressure on yellow metal.

Oil

Oil prices rose as much as 1% on strong demand in the United States, as data showed that U.S. crude inventories declined by 5.8 million barrels to 503.7 million for the week ended June 30. Today, markets are awaiting supply data from the Energy Information Administration, as the EIA is expected to report a decline in U.S. crude inventories of about 2.8 million barrels. Brent crude futures rose as much as 0.7% or 34 cents, to settle at $48.13 per barrel by 05:13 GMT.

The most important economic events:

  • USD ISM Services/Non-Manufacturing Composite (JUN): (GMT 14:00) – Important – Forecast (56.5) – Previous (56.9).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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