Breaking News: Dollar Strengthens Despite Soft Interest Rates, Bank of Canada Expected to Cut Rates
In today’s market, the dollar has stabilized and is pushing against CAD1.38, reaching levels not seen in three months. Despite soft interest rates, the US dollar gains are coming through, with the US slightly lower but remaining within a set range.
A disappointing Eurozone PMI and risk-off sentiment have widened peripheral premiums over core rates in Europe. Most emerging market currencies, particularly from central Europe and the , are leading the decliners.
Equities are facing a poor session due to disappointing earnings reports. Europe’s is down 0.65%, giving back gains made earlier in the week. US future indices are also down, indicating a lower opening.
Gold is on the rise, reaching a three-day high below $2420, while September WTI stabilizes after a recent plunge. Private US inventories are dropping, with reports of wildfires in Canada threatening oil output.
In Asia Pacific, Japan’s PMI has raised expectations of a rate hike next week, with the composite PMI improving. Australia’s composite PMI has eased, but quarterly CPI numbers next week could bring upside risks.
The yen has seen a strong recovery, with the dollar weakening against it. The has fallen for seven consecutive sessions, hitting a new low. The is struggling to stabilize amidst concerns about the exchange rate.
In Europe, the eurozone composite fell for the first time in June, while France and the UK show contrasting performance. The UK’s composite PMI has recovered, reaching 52.7 in July after a slip in previous months.
Overall, the market is facing challenges from disappointing economic data, geopolitical tensions, and uncertainty surrounding interest rates. Investors should stay informed and seek professional advice to navigate these volatile times and protect their investments. Unprecedented Surge in Services PMI in April 2023 Slows Down in May and June, Boosting Investor Confidence: Expert Analysis
In a surprising turn of events, the services PMI peaked at an all-time high of 55.0 in April 2023, sending shockwaves through the financial markets. However, the momentum slowed in May and June, with a slight uptick to 52.4 in July. This fluctuation has caught the attention of investors worldwide, especially with the upcoming Bank of England meeting on August 1.
The odds of a rate cut have diminished, as pricing in the swaps market indicates a 45% chance of a cut next week, down from nearly 70% in early July. This uncertainty has led to a shift in focus towards the Euro, which has entered a critical target area, prompting experts to predict a potential downturn in the near future.
Meanwhile, Sterling has experienced a recent surge, breaking through $1.29 for the first time in eight sessions. However, with daily momentum indicators pointing towards corrective pressure, further downward movement is expected. This has raised concerns among traders and investors, who are closely monitoring the situation for potential risks.
In America, economic data such as US inventory and goods trade figures have become crucial for forecasting the Q2 estimate. The PMI and ISM indicators have shown contrasting trends, adding to the uncertainty in the market. The upcoming Bank of Canada meeting is also a key event to watch, with expectations of a second consecutive rate cut.
Overall, the global financial landscape is facing a period of volatility and uncertainty, with various economic indicators pointing towards potential risks and opportunities. Investors and traders are advised to stay vigilant and adapt their strategies accordingly to navigate through these challenging times.