Key Events to Watch on Wednesday, July 24
Midweek trading is set to be influenced by key macroeconomic events, potentially heightening market volatility. On Wednesday, S&P Global will release preliminary July Manufacturing and Services PMI data for Germany, the Eurozone, the UK, and the US. During American trading hours, the Bank of Canada (BoC) will announce its monetary policy decisions. Additionally, the US economic calendar will feature Goods Trade Balance and Wholesale Inventories for June.
U.S. Dollar Performance This Week
The table below shows the percentage change of the US Dollar (USD) against major currencies this week, highlighting that the USD was strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.35% | 0.23% | -1.82% | 0.57% | 1.34% | 1.46% | 0.37% | |
| EUR | -0.35% | -0.14% | -2.20% | 0.16% | 1.03% | 1.04% | -0.07% | |
| GBP | -0.23% | 0.14% | -2.15% | 0.29% | 1.16% | 1.16% | 0.05% | |
| JPY | 1.82% | 2.20% | 2.15% | 2.45% | 3.29% | 3.29% | 2.13% | |
| CAD | -0.57% | -0.16% | -0.29% | -2.45% | 0.87% | 0.89% | -0.22% | |
| AUD | -1.34% | -1.03% | -1.16% | -3.29% | -0.87% | 0.01% | -1.11% | |
| NZD | -1.46% | -1.04% | -1.16% | -3.29% | -0.89% | -0.01% | -1.07% | |
| CHF | -0.37% | 0.07% | -0.05% | -2.13% | 0.22% | 1.11% | 1.07% |
The heat map illustrates percentage changes of major currencies against each other. The base currency is selected from the left column, while the quote currency is selected from the top row.
Market Performance and Currency Movements
The US Dollar has benefited from a shift towards risk aversion, strengthening against major rivals. On Tuesday, the USD Index recorded its highest close in nearly two weeks at approximately 104.50. Early Wednesday, the USD Index remains in consolidation, while US stock index futures decline between 0.4% and 0.9%. The 10-year US Treasury bond yield holds above 4.2%, following an unchanged close on Tuesday.
The BoC is anticipated to reduce the policy rate by 25 basis points to 4.5%. Following the rate decision announcement at 13:45 GMT, BoC Governor Tiff Macklem will discuss the policy outlook and answer questions. USD/CAD extended its gains for the fifth consecutive trading day on Tuesday, reaching its highest level since mid-April, trading near 1.3800.
Currency Pair Movements
- EUR/USD: The pair fell below 1.0850 on Tuesday after failing to reclaim 1.0900. The bearish trend continued into Wednesday.
- GBP/USD: After dipping below 1.2900 on Tuesday, the pair couldn’t sustain recovery momentum and remains under pressure below 1.2900.
- AUD/USD: The Judo Bank Composite PMI for Australia dropped to 50.2 in July from 50.7 in June. This data pushed AUD/USD below 0.6600 early Wednesday.
- USD/JPY: Despite USD strength, USD/JPY fell nearly 1% on Tuesday and continued to decline early Wednesday, trading near 154.50.
Commodities and Political Developments
Gold rebounded on Tuesday, closing above $2,400, and edged higher towards $2,420 early Wednesday. Crude oil prices rose, snapping a three-day decline, supported by a 3.9 million barrel decline in U.S. oil inventories, indicating strong demand during the summer travel season.
Key Analysis and Takeaways
Wednesday’s market movements are heavily influenced by macroeconomic data releases and central bank decisions. Investors should closely monitor these developments, as they can significantly impact currency pairs and commodity prices. Understanding the interplay between economic indicators and market reactions is crucial for making informed investment decisions.
| 📈 Investment Opportunity | 📊 Risk Tolerance | 💰 Profit Potential | 🔍 Key Factors |
|---|---|---|---|
| Gold (XAU/USD) | Moderate | High | Safe-haven demand, inflation |
| USD/CAD | Moderate | High | BoC rate decision, oil prices |
| EUR/USD | Moderate | Moderate | Eurozone PMI data, ECB policies |
| AUD/USD | High | Moderate | Australian economic data, commodity prices |