As the risk-off sentiment prevails in the market, the Greenback has managed to regain some balance, pushing the USD Index (DXY) back towards the 104.50 zone despite a retreat in global money market yields. Looking ahead to Wednesday, July 24, it’s PMI-day with key data releases in the US including Q2 GDP and PCE.
What You Need to Know on Wednesday, July 24:
The USD Index (DXY) saw modest gains as it revisited the 104.50 zone despite lower US yields. On July 24, keep an eye out for advanced Goods Trade Balance data followed by New Home Sales and the preliminary S&P Global Manufacturing and Services PMIs.
EUR/USD took a hit, dropping to multi-day lows near 1.0840 amidst the risk aversion sentiment. Expect the flash HCOB Manufacturing and Services PMIs in Germany and the euro bloc on July 24.
GBP/USD broke below the 1.2900 support level due to a stronger US dollar and overall risk-off sentiment. The focus in the UK on July 24 will be on the advanced S&P Global Manufacturing and Services PMIs.
USD/JPY continued its retracement, approaching multi-week lows below 156.00. Keep an eye out for the preliminary Jibun Bank Manufacturing and Services PMIs on July 24.
AUD/USD faced downside pressure, trading close to the 0.6600 level. Look out for the flash Judo Bank Manufacturing and Services PMIs on July 24.
Concerns over demand from China and easing geopolitical tensions pushed WTI prices to six-week lows below $77.00 per barrel.
Gold prices saw a slight increase, reversing four days of losses to surpass the $2,400 level per ounce. Silver also saw a modest increase above $29.00 per ounce.
Analysis:
In summary, the USD Index (DXY) managed to regain balance despite global money market yields retreating. Key data releases ahead, such as Q2 GDP and PCE in the US, will play a crucial role in shaping market sentiment. The risk-off environment has impacted major currency pairs, with EUR/USD, GBP/USD, and USD/JPY all experiencing significant movements. Additionally, concerns over demand from China and geopolitical tensions have weighed on WTI prices. Gold and silver prices have seen some upward movement, providing a safe haven for investors amid market uncertainty.