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Forex Today: US Dollar consolidates weekly gains as focus shifts to key inflation data
398983 June 28, 2024 15:33 FXStreet Market News
Here is what you need to know on Friday, June 28:
The US Dollar Index holds steady at around 106.00 early Friday, fluctuating near the multi-week high it set this week. The Bureau of Economic Analysis (BEA) will release the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) preferred gauge of inflation, for May, alongside Personal Spending and Personal Income data, later in the session.Â
US Dollar PRICE This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the New Zealand Dollar.
| Â | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| USD | Â | -0.09% | -0.03% | 0.72% | 0.15% | 0.12% | 0.87% | 0.58% |
| EUR | 0.09% | Â | 0.08% | 0.90% | 0.29% | 0.23% | 1.00% | 0.74% |
| GBP | 0.03% | -0.08% | Â | 0.75% | 0.21% | 0.15% | 0.92% | 0.66% |
| JPY | -0.72% | -0.90% | -0.75% | Â | -0.57% | -0.57% | 0.18% | -0.15% |
| CAD | -0.15% | -0.29% | -0.21% | 0.57% | Â | -0.03% | 0.71% | 0.46% |
| AUD | -0.12% | -0.23% | -0.15% | 0.57% | 0.03% | Â | 0.77% | 0.51% |
| NZD | -0.87% | -1.00% | -0.92% | -0.18% | -0.71% | -0.77% | Â | -0.26% |
| CHF | -0.58% | -0.74% | -0.66% | 0.15% | -0.46% | -0.51% | 0.26% | Â |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Over the weekend, the first round of the French election will take place. According to the latest IFOP Poll, Marine Le Pen’s National Rally party is seen in the lead in the first round with 36% of votes, while President Emmanuel Macron centrist camp is seen in the third place with 21% of votes, behind the left wing New Popular Front, which is projected to receive 29% of votes.
Major equity indexes in the US closed little changed on Thursday as investors refrained from taking large positions ahead of the first Presidential Debate in the US. Early Friday, US stock index futures trade marginally higher and the benchmark 10-year US Treasury bond yield fluctuates in a tight range at around 4.3%.
In the European morning on Friday, the data from the UK showed that the Gross Domestic Product grew at an annual rate of 0.3% in the first quarter. This reading came in above the previous estimate and the market expectation of 0.2%. After posting small gains on Thursday, GBP/USD struggles to extend its recovery and trades below 1.2650.
EUR/USD snapped a two-day losing streak on Thursday but lost its bullish momentum. Early Friday, the pair fluctuates in a tight channel slightly below 1.0700.
During the Asian trading hours, the data from Japan showed that the Tokyo Consumer Price Index rose 2.3% on a yearly basis in June. This reading followed the 2.2% increase recorded in April. Additionally, the Unemployment Rate held steady at 2.6% in May as forecast. USD/JPY extended its weekly rally and touched a fresh multi-decade high near 161.30 in the early Asian session. The pair seems to have entered a consolidation phase at around 161.00 following the earlier jump. Japan’s Chief Cabinet Secretary Yoshimasa Hayashi repeated on Friday that they will take appropriate steps on excessive moves in foreign exchange markets.
After testing $2,300 on Wednesday, Gold regained its traction and registered strong gains on Thursday. XAU/USD stays relatively quiet and trades above $2,320 in the European morning on Friday.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
1643 | +0.596% | GBPJPY
398293 June 28, 2024 15:15 SwingFish Trading Room Journal GBPJPY
Today’s risk: 1.6% [Drawdown: 0.454%] (more…)
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Spain Harmonized Index of Consumer Prices (YoY) above forecasts (3.4%) in June: Actual (3.5%)
398974 June 28, 2024 15:12 FXStreet Market News
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.
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EUR/USD Price Analysis: Trades below 1.0700, stays within the consolidative range
398972 June 28, 2024 15:12 FXStreet Market News
- EUR/USD may test the throwback support of 1.0670 around the lower level within the consolidative range.
- The 14-day RSI consolidates below the 50 level; indicating a consolidative range within levels of 1.0760-1.0670.
- The pair could find an immediate barrier at the 14-day EMA at 1.0728.
EUR/USD retraces its gains registered in the previous session, trading around 1.0690 during the Asian hours on Friday. The technical analysis of the daily chart indicates a bearish bias, with the pair consolidating within a descending channel.
The 14-day Relative Strength Index (RSI) is consolidating below the 50 level, suggesting the EUR/USD pair trades within a consolidative range between levels of 1.0760 and 1.0670. If the RSI improves to the 50 level, it would weaken the bearish momentum for the pair.
The EUR/USD pair may test the lower level of the range at 1.0670, which also acts as a throwback support. A break below this level would reinforce the bearish bias, potentially pushing the pair toward the lower boundary of the descending channel near 1.0620.
On the upside, the EUR/USD pair could encounter immediate resistance at the 14-day Exponential Moving Average (EMA) at 1.0728 followed by the upper level of the range at 1.0760. A breakthrough above the latter could lead the pair to test the upper boundary of the descending channel at 1.0780, followed by the psychological level of 1.0800.
EUR/USD: Daily Chart
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECBÂ’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the EurozoneÂ’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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398971 June 28, 2024 15:11 FXStreet Market News
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.
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Spain Consumer Price Index (YoY) registered at 3.4% above expectations (3.3%) in June
398970 June 28, 2024 15:11 FXStreet Market News
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.
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Austria Producer Price Index (YoY) rose from previous -4.8%Â to -3.5% in May
398968 June 28, 2024 15:05 FXStreet Market News
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.
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Spain Harmonized Index of Consumer Prices (MoM) in line with expectations (0.3%) in June
398967 June 28, 2024 15:05 FXStreet Market News
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.
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