Articles
Powell, Fedspeak and a 10-year auction top the economic calendar today
401565 July 10, 2024 21:16 Forexlive Latest News Market News
AI
image
Did
you
enjoy
the
first
two
hours
of
Powell’s
testimony?
How
about
another
two?
Only
this
time
with
the
crazies
in
the
House.
Tune
in
at
10
am
ET
for
all
the
fun
but
don’t
expect
much
in
the
way
of
market-moving
information.
Powell
stayed
tightly
on
script
yesterday
and
I
wouldn’t
expect
a
departure
today.
Powell
isn’t
the
only
central
banker
speaking
today
as
we
get
Goolsbee
and
Bowman
at
2:30
pm
ET.
However
that
event
is
a
‘Fed
Listens’
event,
which
is
what
it
sounds
like
—
more
listening
than
talking.
The
Bank
of
England
will
be
a
focus
with
chief
economist
Hew
Pill
at
9:30
am
ET
and
MPC
hawk
Mann
at
11:30
am
ET.
I’ll
be
watching
to
see
if
the
latter
tones
down
her
hawkishness.
In
terms
of
data,
we
get
wholesale
sales/inventories
at
10
am
ET
but
that’s
not
likely
to
move
markets.
Instead,
the
results
of
the
10-year
auction
at
1
pm
ET
will
be
notable.
Pound Sterling gains on firm Fed rate cut prospects, US Inflation in focus
401563 July 10, 2024 21:15 FXStreet Market News
-
The
Pound
Sterling
exhibits
strength
against
the
US
Dollar
as
Fed’s
Powell
sees
softness
in
the
US
labor
market
strength. -
The
Fed
chief
did
not
guide
any
specific
rate-cut
path. -
UK
GDP
for
May
and
US
Inflation
for
June
have
come
under
the
spotlight.
The
Pound
Sterling
(GBP)
edges
higher
against
the
US
Dollar
(USD)
in
Wednesday’s
American session
after
a
mild
correction
from
almost
a
four-week
high
of
1.2850
this
week.
The
broader
appeal
of
the
GBP/USD
pair
remains
firm
amid
strong
speculation
that
the
Federal
Reserve
(Fed)
will
start
reducing
interest
rates
during
the
September
meeting.
The
odds
for
the
Fed
pivoting
to
policy
normalization
remain
firm
even
though
Fed
Chair
Jerome
Powell
reiterated
in
his
semi-annual
Congressional
testimony
on
Tuesday,
refrained
from
providing
any
specific
rate-cut
path
for
this
year.
Powell
argued
in
favor
of
maintaining
interest
rates
at
their
current
levels
for
long
until
they
get
evidence
that
inflation
will
return
to
the
desired
rate
of
2%.
What
was
unexpected
from
Fed
Powell’s
commentary
before
Congress
is
his
acknowledgement
that
the
United
States
(US)
economy
is
no
longer
overheated,
with
cooling
job
market
conditions.
Powell
said
that
the
labor
market
has
moderated
to
where
it
was
before
pandemic-era.
Now
that
risks
have
become
two-sided,
a
rate-cut
move
by
the
Fed
in
September
appears
to
be
a
done
deal.
For
more
clarity,
investors
will
focus
on
the
US
Consumer
Price
Index
(CPI)
report
for
June,
which
will
be
published
on
Thursday.
The
report
is
expected
to
show
that
the
core
inflation,
which
strips
off
volatile
food
and
energy
items,
grew
steadily
by
0.2%
and
3.4%
on
a
monthly
and
annual
basis,
respectively.
Annual
headline
inflation
is
estimated
to
have
decelerated
to
3.1%
from
May’s
reading
of
3.3%,
while
the
monthly
figure
is
expected
to
have
barely
grown
after
remaining
unchanged.
A
scenario
in
which
price
pressures
remain
sticky
or
hot
would
ease
expectations
for
rate
cuts
in
September.
On
the
contrary,
soft
numbers
will
boost
them.
Daily
Digest
Market
Movers:
Pound
Sterling
remains
firm
with UK
GDP/US
CPI
in
focus
-
The
Pound
Sterling
performs
strongly
against
its
major
peers
due
to
multiple
tailwinds.
The
British
currency
strengthens
as
the
outright
victory
of
the
United
Kingdom
(UK)
Keir
Starmer-led
Labour
Party
in
parliamentary
elections
against
Rishi
Sunak-led
Conservative
Party
has
brought
political
stability
to
the
economy.
The
uncertainty
over
the
Bank
of
England
(BoE)
rate-cut
path
has
deepened
after
hawkish
guidance
from
BoE
policymaker
Jonathan
Haskel. -
On
Monday,
Jonathan
Haskel,
who
has
been
amongst
major
hawks,
said
no
to
a
rate
cut
in
August
as
inflation
in
the
labor
market
is
still
higher
due
to
strong
wage
growth.
Haskel
said,
“I
would
rather
hold
rates
until
there
is
more
certainty
that
underlying
inflationary
pressures
have
subsided
sustainably,”
Reuters
reported. -
On
the
contrary,
financial
markets
currently
expect
that
the
BoE
will
begin
cutting
its
key
rates
from
the
August
meeting.
The
expectations
for
BoE
rate
cuts
in
August
have
been
prompted
by
the
return
of
the
annual
headline
inflation
to
bank’s
target
of
2%. -
Meanwhile,
investors
shift
focus
to
the
monthly
Gross
Domestic
Product
(GDP)
and
factory
data
for
May,
which
will
be
published
on
Thursday.
Economists
expect
that
the
economy
expanded
by
0.2%
after
remaining
unchanged
in
April.
Industrial
and
Manufacturing
Production
are
expected
to
have
grown
on
a
monthly
and
annual
basis
after
declining
in
April.
Pound
Sterling
Price
Today:
British
Pound
PRICE
Today
The
table
below
shows
the
percentage
change
of
British
Pound
(GBP)
against
listed
major
currencies
today.
British
Pound
was
the
strongest
against
the
New
Zealand
Dollar.
| GBP | EUR | USD | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| GBP | 0.01% | 0.10% | 0.17% | 0.11% | 0.00% | 0.74% | 0.00% | |
| EUR | -0.01% | 0.09% | 0.14% | 0.10% | -0.00% | 0.74% | 0.01% | |
| USD | -0.10% | -0.09% | 0.05% | -0.01% | -0.08% | 0.67% | -0.06% | |
| JPY | -0.17% | -0.14% | -0.05% | -0.05% | -0.15% | 0.57% | -0.14% | |
| CAD | -0.11% | -0.10% | 0.01% | 0.05% | -0.08% | 0.66% | -0.08% | |
| AUD | -0.00% | 0.00% | 0.08% | 0.15% | 0.08% | 0.74% | -0.01% | |
| NZD | -0.74% | -0.74% | -0.67% | -0.57% | -0.66% | -0.74% | -0.73% | |
| CHF | -0.01% | -0.01% | 0.06% | 0.14% | 0.08% | 0.00% | 0.73% |
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
British
Pound
from
the
left
column
and
move
along
the
horizontal
line
to
the
US
Dollar,
the
percentage
change
displayed
in
the
box
will
represent
GBP
(base)/USD
(quote).
Technical
Analysis:
Pound
Sterling
clings
to
gains
near
1.2800
The
Pound
Sterling
aims
to
hold
the
key
figure
of
1.2800
against
the
US
Dollar.
The
GBP/USD
pair
gathers
strength
for
a
decisive
breakout
of
the
Inverted
Head
and
Shoulder
(H&S)
chart
formation
on
a
daily
timeframe
whose
neckline
is
plotted
near
1.2850.
A
breakout
of
the
H&S
formation
results
in
a
bullish
reversal.
Advancing
20-day
Exponential
Moving
Average
(EMA)
near
1.2730,
suggests
that
the
near-term
trend
is
bullish.
The
14-day
Relative
Strength
Index
(RSI)
climbs
into
the
bullish
range
of
60.00-80.00.
A
sustained
move
above
the
same
will
keep
the
momentum
towards
the
upside.
EUR/USD Forecast: Consolidative phase continues with bulls maintaining the pressure
401561 July 10, 2024 21:14 FXStreet Market News
EUR/USD
Current
price:
1.0824
-
The
US
Dollar
can
not
lift
its
head
after
Federal
Reserve’s
Powell
resumed
the
hawkish
tone. -
Market
participants
await
a
United
States
inflation
update
on
Thursday. -
EUR/USD
trades
within
familiar
levels
but
bulls
remain
in
charge.
The
EUR/USD
pair
trades
uneventfully
at
around
1.0820
on
Wednesday,
still
confined
to
a
tight
intraday
range,
with
the
US
Dollar
maintaining
the
soft
tone
across
the
FX
board.
Financial
markets
were
unable
to
take
directional
clues
from
Federal
Reserve
(Fed)
Chairman
Jerome
Powell’s
testimony
before
Congress.
Powell´s
words
on
monetary
policy
resumed
the
hawkish
tone
that
he
partially
abandoned
in
Sintra,
triggering
a
short-lived
USD
run.
Still,
market
participants
remain
unconvinced,
awaiting
a
clue
that
does
not
seem
to
come.
Everything
about
the
United
States
(US)
economy
seems
to
be
moving
in
the
right
direction—growth,
employment,
and
inflation—but
at
a
pace
that
does
not
require
the
Fed’s
intervention.
Additional
hints
will
come
on
Thursday
when
the
US
will
publish
Consumer
Price
Index
(CPI)
figures.
Annual
inflation
is
foreseen
up
3.1%
in
June
while
the
monthly
increase
is
expected
to
be
0.1%.
Finally,
the
core
annual
CPI
is
foreseen
unchanged
at
3.4%.
Meanwhile,
today’s
focus
will
be
on
speeches
from
Fed
policymakers,
including
Chair
Powell.
Powell
will
repeat
its
testimony
on
monetary
policy
before
a
different
commission
in
the
American
afternoon.
EUR/USD
short-term
technical
outlook
From
a
technical
point
of
view,
the
EUR/USD
pair
is
bullish,
according
to
the
daily
chart.
The
pair
keeps
comfortably
trading
above
all
its
moving
averages,
with
the
100
and
200
Simple
Moving
Averages
(SMAs)
converging
around
1.0790
and
providing
support.
At
the
same
time,
technical
indicators
aim
to
resume
their
advances
whitin
positive
levels,
skewing
the
risk
to
the
upside,
although
without
confirming
an
upcoming
rally.
EUR/USD
is
neutral-to-bullish
in
the
near
term.
The
4-hour
chart
shows
a
directionless
20
SMA
caps
advances,
although
the
longer
moving
averages
tick
marginally
higher,
well
below
the
current
level.
Finally,
the
Momentum
indicator
lacks
directional
strength
around
its
100
line,
but
the
Relative
Strength
Index
(RSI)
indicator
picked
up
within
positive
levels,
in
line
with
increased
buying
interest.
Bulls
will
be
more
comfortable
once
the
1.0850
area
is
cleared,
while
bears
can
take
their
chances
on
a
break
below
1.0790.
Support
levels:
1.0790
1.0740
1.0700
Resistance
levels:
1.0850
1.0880
1.0930
Silver Price Analysis: Forms Triangle or Bull Pennant within a Measured Move
401558 July 10, 2024 20:39 FXStreet Market News
-
Silver
is
forming
a
Symmetrical
Triangle,
or
Bull
Pennant
continuation
pattern
with
bullish
implications
for
price. -
It
is
also
probably
rising
up
in
the
final
wave
C
of
a
Measured
Move
price
pattern,
also
with
bullish
expectations. -
MACD
is
poised
to
rise
higher
after
crossing
the
zero-line.
Silver
(XAG/USD)
has
formed
a
price
pattern
after
its
recent
rally,
which
saw
it
break
out
of
its
falling
channel.
The
price
pattern
could
either
be
a
Symmetrical
Triangle
(ST)
pattern,
or
perhaps
a
Bull
Pennant
continuation
pattern;
the
first
has
slightly
bullish
connotations,
the
second
has
stronger
bullish
implications.
Silver
Daily
Chart
More
broadly
Silver
is
also
probably
in
the
process
of
rising
up
in
the
final
wave
C
of
a
three-wave
Measured
Move
(MM),
with
a
final
price
target
substantially
higher
than
the
current
market
level.
STs
do
not
give
a
hint
of
the
direction
of
the
breakout
but
it
is
usually
in
the
direction
of
the
prior
trend.
Bull
Pennants,
however,
are
bullish
and
strongly
suggest
higher
prices
to
come.
MMs
are
like
large
zig-zags
composed
of
three
waves,
sometimes
labeled
A,B
and
C.
As
Silver
price
is
currently
rising
up
in
wave
C
it
is
likely
to
go
higher,
either
till
it
reaches
the
end
of
wave
C
or,
more
conservatively
$32.75
(
calculated
as
the
0.618
extrapolation
of
wave
A).
If
it
reaches
the
end
of
C
it
could
rally
to
$35.00.
A
break
above
the
top
of
the
ST/Pennant
at
$31.49
would
provide
confirmation
of
the
next
leg
higher.
The
Moving
Average
Convergence
Divergence
(MACD)
momentum
indicator
has
crossed
above
the
zero
line
and
looks
poised
to
continue
higher,
with
bullish
implications
for
price.
Natural Gas remains silent with prices not moving while Freeport opens up
401556 July 10, 2024 20:39 FXStreet Market News
-
Natural
Gas
comes
to
a
standstill
and trades
sideways
in
a
tight
range. -
Traders
are
looking
for
good
news
out
of
Freeport,
where
production
should
reopen. -
The
US
Dollar
index
trades
flat
above
105.00
and
looks
for
direction
after
a
boring
Powell
speech.
Natural
Gas
price
(XNG/USD)
is
unable
to
extend
the
bounce
it
triggered
on
Monday
and
trades
steady
in
a
tight
range
on
Wednesday.
The
more
than
ten-day
correction
finally
snapped
after
Natural
Gas
reached
a
pivotal
level
at
$2.29
and
has
been
afloat
since
then.
Traders
are
on
the
lookout
for
any
news
from
the
Freeport
production
plant
in
the
US
after
storm
Beryl
forced
to
reduce
production
sharply
to
only
20%,
creating
uncertainty
about
Gas
deliveries
for
Europe
and
other
parts
of
the
world.
Meanwhile,
the
US
Dollar
Index
(DXY),
which
tracks
the
Greenback’s
value
against
six
major
currencies,
is
also
having
some
issues.
US
Federal
Reserve
(Fed)
Chairman
Jerome
Powell
was
unable
to
deliver
anything
new
in
his
semi-annual
testimony
before
the
US
Congress.
Traders
are
facing
boredom
in
hearing
the
same
repeated
message
again
that
it
is
too
early
to
cut
interest
rates.
Natural
Gas
is
trading
at
$2.35 per
MMBtu
at
the
time
of
writing.
Natural
Gas
news
and
market
movers:
Silence
is
deafening
in
the
futures
market
-
Traders
are
looking
for
clues
about
whether
the
Freeport
plant
in
Texas
can
reopen
back
in
full
after
it
had
to
reduce
production
due
to
storm
Beryl
passing
in
the
region,
according
to
Reuters. -
China
demand
might
remain
curbed
at
current
Gas
prices,
with
Chinese
traders
only
interested
in
buying
contracts
below
$2.00,
according
to
Bloomberg. -
Newsbase
reports
that
the
US
Treasury
Department
has
extended
authorization
to
export
and
re-export
Liquefied
Petroleum
Gas
(LPG)
to
Venezuela
until
July
8,
2025.
Natural
Gas
Technical
Analysis:
Get
things
moving
Natural
Gas
price
has
bounced
right
off
the
support
level
FXStreet
mentioned
in
previous
articles
at
$2.29
on
Monday,
with
the
100-day
Simple
Moving
Average
(SMA)
alongside
the
green
ascending
trend
line
in
the
chart
below
as
support.
The
bounce,
though,
is
not
really
playing
out
as
Gas
prices
are
rather
going
sideways.
Markets
will
await
a
catalyst
to
either
retest
that
support
again
or
send
Gas
prices
higher.
The
200-day
SMA
is
the
first
force
to
reckon
with
on
the
upside,
near
$2.51,
closely
followed
by
the
55-day
SMA
at
$2.62.
Once
back
above,
the
pivotal
level
near
$3.08
(March
6,
2023,
high)
remains
key
resistance
after
its
false
break
last
week.
On
the
other
hand,
the
support
level,
which
could
mean
some
buying
opportunities,
is
$2.29,
the
100-day
SMA
that
falls
in
line
with
the
ascending
trend
line
since
mid-February.
In
case
that
level
does
not
hold
as
support,
look
for
the
pivotal
level
near
$2.13,
which
has
acted
as
a
cap
and
floor
in
the
past.
Natural
Gas:
Daily
Chart
Natural
Gas
FAQs
Supply
and
demand
dynamics
are
a
key
factor
influencing
Natural
Gas
prices,
and
are
themselves
influenced
by
global
economic
growth,
industrial
activity,
population
growth,
production
levels,
and
inventories.
The
weather
impacts
Natural
Gas
prices
because
more
Gas
is
used
during
cold
winters
and
hot
summers
for
heating
and
cooling.
Competition
from
other
energy
sources
impacts
prices
as
consumers
may
switch
to
cheaper
sources.
Geopolitical
events
are
factors
as
exemplified
by
the
war
in
Ukraine.
Government
policies
relating
to
extraction,
transportation,
and
environmental
issues
also
impact
prices.
The
main
economic
release
influencing
Natural
Gas
prices
is
the
weekly
inventory
bulletin
from
the
Energy
Information
Administration
(EIA),
a
US
government
agency
that
produces
US
gas
market
data.
The
EIA
Gas
bulletin
usually
comes
out
on
Thursday
at
14:30
GMT,
a
day
after
the
EIA
publishes
its
weekly
Oil
bulletin.
Economic
data
from
large
consumers
of
Natural
Gas
can
impact
supply
and
demand,
the
largest
of
which
include
China,
Germany
and
Japan.
Natural
Gas
is
primarily
priced
and
traded
in
US
Dollars,
thus
economic
releases
impacting
the
US
Dollar
are
also
factors.
The
US
Dollar
is
the
world’s
reserve
currency
and
most
commodities,
including
Natural
Gas
are
priced
and
traded
on
international
markets
in
US
Dollars.
As
such,
the
value
of
the
US
Dollar
is
a
factor
in
the
price
of
Natural
Gas,
because
if
the
Dollar
strengthens
it
means
less
Dollars
are
required
to
buy
the
same
volume
of
Gas
(the
price
falls),
and
vice
versa
if
USD
strengthens.
ForexLive European FX news wrap: Markets begin CPI countdown, kiwi holds lower post-RBNZ
401552 July 10, 2024 20:15 Forexlive Latest News Market News
Headlines:
Markets:
-
GBP
leads,
NZD
lags
on
the
day -
European
equities
higher;
S&P
500
futures
up
0.2% -
US
10-year
yields
down
3
bps
to
4.27% -
Gold
up
0.6%
to
$2,378.12 -
WTI
crude
down
0.2%
to
$81.22 -
Bitcoin
up
1.0%
to
$58,510
It
was
a
relatively
quiet
session
and
unsurprisingly
so.
Markets
are
now
caught
in
a
lull,
awaiting
the
US
inflation
report
tomorrow.
As
such,
traders
lacked
any
real
conviction
during
the
session.
The
main
mover
on
the
day
remains
the
New
Zealand
dollar,
which
fell
in
Asia
Pacific
trading
after
a
more
dovish
stance
adopted
by
the
Reserve
Bank
of
New
Zealand.
NZD/USD
remains
down
0.8%
to
0.6070
levels,
where
it
was
holding
mostly
since
the
drop.
Besides
that,
major
currencies
didn’t
offer
too
much
else
with
narrow
ranges
prevailing
for
the
most
part.
EUR/USD
is
up
marginally
by
0.1%
but
is
stuck
within
a
15
pips
range.
So,
that
speaks
much
to
the
overall
mood
today.
In
the
equities
space,
European
stocks
are
bouncing
back
a
little
after
the
selloff
yesterday.
The
better
mood
in
Wall
Street
is
helping
but
overall,
French
political
jitters
are
still
a
cause
for
concern.
Now,
the
wait
continues
ahead
of
the
main
event
tomorrow
then.
USD/CHF Price Analysis: Consolidates below 0.9000 as focus shifts to US Inflation
401550 July 10, 2024 20:14 FXStreet Market News
-
USD/CHF
trades
back
and
forth
below
0.9000
with
US
inflation
in
focus. -
US
core
inflation
is
estimated
to
have
risen
steadily
in
June. -
Easing
Swiss
inflation
has
boosted
expectations
of
more
SNB
rate
cuts.
The
USD/CHF
pair
trades
sideways
slightly
below
the
psychological
resistance
of
0.9000
in
Wednesday’s
European
session.
The
Swiss
Franc
asset
struggles
for
a
direction
as
investors
await
the
United
States
(US)
Consumer
Price
Index
(CPI)
data
for
June,
which
will
be
published
on
Thursday.
The
US
CPI
report
is
expected
to
show
that
the
core
CPI,
which
excludes
volatile
food
and
energy
prices,
rose
steadily
by
0.2%
and
3.4%
on
monthly
and
an
annual
basis.
Monthly
headline
inflation
is
expected
to
have
grown
by
0.1%
after
remaining
unchanged
previously.
While
the
annual
figure
is
estimated
to
have
decelerated
to
3.1%
from
May’s
reading
of
3.3%.
A
scenario
in
which
price
pressures
remain
sticky
or
hot
would
ease
expectations
for
rate
cuts
in
September.
On
the
contrary,
soft
numbers
will
boost
them.
Meanwhile,
the
near-term
appeal
of
the
Swiss
Franc
remains
uncertain
as
cooling
inflationary
pressures
have
boosted
expectations
of
more
rate
cuts
by
the
Swiss
National
Bank
(SNB).
Swiss
annual
CPI
rose
at
a
slower
pace
of
1.3%
in
June
from
estimates
and
the
prior
release
of
1.4%.
USD/CHF
trades
in
a
Falling
Channel
chart
pattern
on
a
daily
timeframe
in
which
each
pullback
is
considered
as
selling
opportunity
by
market
participants.
The
Swiss
Franc
asset
finds
cushion
near
200-day
Exponential
Moving
Average
(EMA)
around
0.8950,
suggesting
that
a
bullish
long-trend
is
intact.
The
14-day
Relative
Strength
Index
(RSI)
oscillates
in
the
40.00-60.00
range,
suggesting
indecisiveness
among
investors.
Going
forward,
a
decisive
upside
above
June
3
high
at
0.9036will
drive
the
asset
towards
May
28
low
at
0.9086,
followed
by
May
30
high
at
0.9140.
On
the
flip
side,
the
asset
would
expose
to
downside
if
it
breaks
below
June
4
low
of
0.8900.
This
would
drag
the
asset
towards
March
21
low
at
0.8840
and
the
round-level
support
of
0.8800.
USD/CHF
daily
chart
Swiss
Franc
FAQs
The
Swiss
Franc
(CHF)
is
Switzerland’s
official
currency.
It
is
among
the
top
ten
most
traded
currencies
globally,
reaching
volumes
that
well
exceed
the
size
of
the
Swiss
economy.
Its
value
is
determined
by
the
broad
market
sentiment,
the
country’s
economic
health
or
action
taken
by
the
Swiss
National
Bank
(SNB),
among
other
factors.
Between
2011
and
2015,
the
Swiss
Franc
was
pegged
to
the
Euro
(EUR).
The
peg
was
abruptly
removed,
resulting
in
a
more
than
20%
increase
in
the
Franc’s
value,
causing
a
turmoil
in
markets.
Even
though
the
peg
isn’t
in
force
anymore,
CHF
fortunes
tend
to
be
highly
correlated
with
the
Euro
ones
due
to
the
high
dependency
of
the
Swiss
economy
on
the
neighboring
Eurozone.
The
Swiss
Franc
(CHF)
is
considered
a
safe-haven
asset,
or
a
currency
that
investors
tend
to
buy
in
times
of
market
stress.
This
is
due
to
the
perceived
status
of
Switzerland
in
the
world:
a
stable
economy,
a
strong
export
sector,
big
central
bank
reserves
or
a
longstanding
political
stance
towards
neutrality
in
global
conflicts
make
the
country’s
currency
a
good
choice
for
investors
fleeing
from
risks.
Turbulent
times
are
likely
to
strengthen
CHF
value
against
other
currencies
that
are
seen
as
more
risky
to
invest
in.
The
Swiss
National
Bank
(SNB)
meets
four
times
a
year
–
once
every
quarter,
less
than
other
major
central
banks
–
to
decide
on
monetary
policy.
The
bank
aims
for
an
annual
inflation
rate
of
less
than
2%.
When
inflation
is
above
target
or
forecasted
to
be
above
target
in
the
foreseeable
future,
the
bank
will
attempt
to
tame
price
growth
by
raising
its
policy
rate.
Higher
interest
rates
are
generally
positive
for
the
Swiss
Franc
(CHF)
as
they
lead
to
higher
yields,
making
the
country
a
more
attractive
place
for
investors.
On
the
contrary,
lower
interest
rates
tend
to
weaken
CHF.
Macroeconomic
data
releases
in
Switzerland
are
key
to
assessing
the
state
of
the
economy
and
can
impact
the
Swiss
Franc’s
(CHF)
valuation.
The
Swiss
economy
is
broadly
stable,
but
any
sudden
change
in
economic
growth,
inflation,
current
account
or
the
central
bank’s
currency
reserves
have
the
potential
to
trigger
moves
in
CHF.
Generally,
high
economic
growth,
low
unemployment
and
high
confidence
are
good
for
CHF.
Conversely,
if
economic
data
points
to
weakening
momentum,
CHF
is
likely
to
depreciate.
As
a
small
and
open
economy,
Switzerland
is
heavily
dependent
on
the
health
of
the
neighboring
Eurozone
economies.
The
broader
European
Union
is
Switzerland’s
main
economic
partner
and
a
key
political
ally,
so
macroeconomic
and
monetary
policy
stability
in
the
Eurozone
is
essential
for
Switzerland
and,
thus,
for
the
Swiss
Franc
(CHF).
With
such
dependency,
some
models
suggest
that
the
correlation
between
the
fortunes
of
the
Euro
(EUR)
and
the
CHF
is
more
than
90%,
or
close
to
perfect.
Mexican Peso continues rising after release of hotter inflation data
401548 July 10, 2024 20:14 FXStreet Market News
-
The
Mexican
Peso
is
rising
after
the
release
of
broadly
inflationary
data
suggests
interest
rates
might
remain
elevated. -
Relatively
high
interest
rates
in
Mexico,
at
11.00%,
are
drawing
foreign
capital
inflows,
supporting
MXN. -
USD/MXN
has
broken
below
the
key
June
24
low
at
17.87.
The
Mexican
Peso
(MXN)
continues
appreciating
in
its
key
pairs
on
Wednesday
after
the
release
of
Mexican
macroeconomic
data
on
Tuesday
showed
continued
signs
of
inflationary
pressures
in
the
economy.
An
overall
beneficial
backdrop
due
to
carry
flows
is
further
supporting
the
Peso
because
of
the
attractiveness
to
foreign
investors
of
the
relatively
high
interest
rates
on
offer
in
Mexico
(11.00%).
The
carry
trade
is
an
operation
in
which
investors
borrow
in
a
currency
where
interest
rates
are
low
(like
the
Yen)
and
bank
the
money
in
a
currency
where
interest
rates
are
high
(like
MXN).
The
difference
between
the
interest
payments
on
the
loan
and
the
interest
paid
on
the
deposit
(or
bond)
renders
the
profit,
all
other
things
being
equal.
At
the
time
of
writing,
one
US
Dollar
(USD)
buys
17.81
Mexican
Pesos,
EUR/MXN
trades
at
19.27,
and
GBP/MXN
at
22.81.
Mexican
Peso
recovers
on
inflationary
data
The
Mexican
Peso
is
recovering
as
investors
mull
recent
macroeconomic
data
that
showed
Mexican
inflation
broadly
rising
in
June.
The
Headline
Inflation
rate
in
Mexico
came
out
at
0.38%
on
a
month-on-month
basis,
beating
the
0.24%
expected
by
economists
and
higher
than
the
negative
0.19%
of
May,
according
to
data
from
INEGI.
Core
Inflation
for
June,
which
excludes
volatile
food
and
energy
components,
came
out
at
0.22%,
falling
below
the
0.24%
estimated
by
economists
but
above
the
0.17%
in
May.
The
12-month
Inflation
rate
in
June,
meanwhile,
came
out
at
4.98%,
which
was
higher
than
the
4.84%
expected
by
economists
and
the
4.69%
previously.
The
slower
increase
in
core
inflation
could
be
critical
in
terms
of
the
outlook
for
interest
rates
in
Mexico,
according
to
investor
advisor
service
of
Capital
Economics.
“Core
inflation
edged
down
last
month.
While
there’s
still
a
lot
of
uncertainty
around
the
next
rate
decision
in
August,
we
think
that
the
easing
of
core
price
pressures,
alongside
the
weak
run
of
activity
data
and
the
rebound
in
the
Peso
leave
an
August
rate
cut
in
play,”
says
Kimberley
Sperrfechter,
Emerging
Markets
Economist
at
Capital
Economics.
Assuming
the
Banxico
does
go
ahead
and
cut
interest
rates
in
August,
this
could
have
a
negative
impact
on
the
Peso.
Technical
Analysis:
USD/MXN
breaches
key
June
24
low
USD/MXN
breaks
below
the
key
June
24
line-in-the-sand
low
at
17.87.
USD/MXN
Daily
Chart
The
break
is
so
far
on
an
intraday
basis.
A
decisive
break
below
17.87,
would
reconfirm
the
down-trending
bias,
with
the
next
target
lying
at
17.50
(50-day
Simple
Moving
Average).
A
decisive
break
would
be
one
accompanied
by
a
long
red
candle
that
closed
near
its
low
or
three
red
candles
in
a
row
that
broke
below
the
level.
As
things
stand,
the
short-term
trend
is
bearish,
and
the
“the
trend
is
your
friend”
adage
suggests
the
odds
favor
an
extension
lower.
The
direction
of
the
medium
and
long-term
trends,
meanwhile,
remain
in
doubt.
Economic
Indicator
Core
Inflation
The
core
inflation
index
released
by
the
Bank
of
Mexico
is
a
measure
of
price
movements
by
the
comparison
between
the
retail
prices
of
a
representative
shopping
basket
of
goods
and
services,
excluding
taxes
and
energy.
The
purchase
power
of
Mexican
Peso
is
dragged
down
by
inflation.
The
inflation
index
is
a
key
indicator
since
it
is
used
by
the
central
bank
to
set
interest
rates.
Generally
speaking,
a
high
reading
is
seen
as
positive
(or
bullish)
for
the
Mexican
Peso,
while
a
low
reading
is
seen
as
negative
(or
Bearish).
India M3 Money Supply declined to 9.7% in June 24 from previous 10.9%
401547 July 10, 2024 19:39 FXStreet Market News
Information
on
these
pages
contains
forward-looking
statements
that
involve
risks
and
uncertainties.
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and
instruments
profiled
on
this
page
are
for
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purposes
only
and
should
not
in
any
way
come
across
as
a
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or
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assets.
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research
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not
guarantee
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this
information
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a
timely
nature.
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in
Open
Markets
involves
a
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deal
of
risk,
including
the
loss
of
all
or
a
portion
of
your
investment,
as
well
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emotional
distress.
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on
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page.
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not
otherwise
explicitly
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in
the
body
of
the
article,
at
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time
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in
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and
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advice.
US Dollar afloat with markets looking for direction
401545 July 10, 2024 19:39 FXStreet Market News
-
The
US
Dollar
turns
flat
this
week
and
trades
relatively
steady
at
current
levels. -
Traders
will
feast
on
no
less
than
four
Fed
speakers
on
Wednesday. -
The
US
Dollar
index
hovers
around
105.00
and
is
looking
for
direction.
The
US
Dollar
(USD)
trades
sideways
and
is
stuck
in
a
tight
range
in
most
currency
pairs
on
Wednesday.
As
such,
that
should
not
come
as
a
surprise
as
the
semi-annual
testimony
from
US
Federal
Reserve
(Fed)
Chairman
Jerome
Powell
before
Congress
on
Tuesday
did
not
bear
any
special
comments
or
new
angles
that
markets
have
not
priced
in
yet.
It
could
have
been
a
tape
recorder
replaying
the
latest
Fed
rate
decision,
with
the
bottom
line
remaining
the
same:
Powell
wants
to
keep
rates
steady
for
longer
as
he
is
afraid
to
start
cutting
too
soon.
On
the
economic
front,
no
real
data
springs
out,
though
it
will
instead
be
the
side
events
that
will
draw
up
all
the
attention.
With
a
10-year
Note
auction,
it
is
an
ideal
moment
to
see
how
the
benchmark
tenor
will
be
behaving
and
how
the
appetite
for
American
debt
is
now
in
the
bond
market.
Add
in
there
no
less
than
three
Fed
members,
besides
Fed
Chairman
Powell,
who
is
heading
to
Congress
again
this
Wednesday,
and
it
looks
to
be
a
rather
Fed-driven
day.
Daily
digest
market
movers:
Summer
breeze
-
At
11:00
GMT,
the
weekly
Mortgage
Applications
data
for
the
week
ending
on
July
5
has
been
released
by
the
Mortgage
Bankers
Association
(MBA).
Last
week,
a
slight
decrease
of
2.6%
was
noted,
with
another
decline
by
0.2%
for
this
week. -
May’s
Wholesale
Inventories
data
will
come
out
at
16:00
GMT.
Expectations
are
for
a
steady
0.6%. -
At
17:00
GMT,
the
US
Treasury
will
allocate
a
10-year
Note
in
the
market. -
Several
Fed
speakers
are
lined
up
on
Wednesday:-
At
14:00
GMT,
Federal
Reserve
Chair
Jerome
Powell
testifies
before
Congress,
providing
a
broad
overview
of
the
economy
and
monetary
policy. -
Federal
Reserve
Governor
Michelle
Bowman
and
Federal
Reserve
Bank
of
Chicago
President
Austan
Goolsbee
will
give
the
opening
remarks
at
the
Fed
Listens
in
Chicago,
United
States,
at
18:30
GMT. -
Federal
Reserve
Governor
Lisa
Cook
delivers
a
speech
titled
‘Global
Inflation
and
Monetary
Policy
Challenges’
at
the
2024
Australian
Conference
of
Economists
in
Adelaide,
Australia,
at
22:30
GMT.
-
At
-
Equity
markets
are
a
bit
mixed,
looking
for
direction
with
no
real
outliers
in
the
European
session. -
The
CME
Fedwatch
Tool
is
broadly
backing
a
rate
cut
in
September
despite
recent
comments
from
Fed
officials.
The
odds
now
stand
at
70.0%
for
a
25-basis-point
cut.
A
rate
pause
stands
at
a
26.7%
chance,
while
a
50-basis-point
rate
cut
has
a
slim
3.3%
possibility. -
The
US
10-year
benchmark
rate
trades
at
4.28%,
near
its
weekly
low.
US
Dollar
Index
Technical
Analysis:
Same
story,
different
day
The
US
Dollar
Index
(DXY)
is
yet
again
looking
for
direction
with
no
substantial
moves,
even
after
Fed
Chairman
Powell’s
comments
on
Tuesday.
Fatigue
is
creeping
into
the
Dollar,
with
markets
looking
for
any
different
message
Powell
might
deliver.
The
continuous
message
that
interest
rates
should
remain
steady,
that
they
are
data-dependent,
and
that
cutting
borrowing
costs
too
early
might
be
counterproductive
is
starting
to
push
investors
out
of
the
Greenback.
On
the
upside,
the
55-day
Simple
Moving
Average
(SMA)
at
105.16
remains
the
first
resistance.
Should
that
level
be
reclaimed
again,
105.53
and
105.89
are
the
following
nearby
pivotal
levels.
The
red
descending
trend
line
in
the
chart
below
at
around
106.23
and
April’s
peak
at
106.52
could
come
into
play
should
the
Greenback
rally
substantially.
On
the
downside,
the
risk
of
a
nosedive
move
is
increasing,
with
only
the
double
support
at
104.80,
which
is
the
confluence
of
the
100-day
SMA
and
the
green
ascending
trend
line
from
December
2023,
still
in
place.
Should
that
double
layer
give
way,
the
200-day
SMA
at
104.41
is
the
gatekeeper
that
should
catch
the
DXY
and
avoid
further
declines.
Further
down,
the
correction
could
head
to
104.00
as
an
initial
stage.
US
Dollar
Index:
Daily
Chart
US
Dollar
FAQs
The
US
Dollar
(USD)
is
the
official
currency
of
the
United
States
of
America,
and
the
‘de
facto’
currency
of
a
significant
number
of
other
countries
where
it
is
found
in
circulation
alongside
local
notes.
It
is
the
most
heavily
traded
currency
in
the
world,
accounting
for
over
88%
of
all
global
foreign
exchange
turnover,
or
an
average
of
$6.6
trillion
in
transactions
per
day,
according
to
data
from
2022.
Following
the
second
world
war,
the
USD
took
over
from
the
British
Pound
as
the
world’s
reserve
currency.
For
most
of
its
history,
the
US
Dollar
was
backed
by
Gold,
until
the
Bretton
Woods
Agreement
in
1971
when
the
Gold
Standard
went
away.
The
most
important
single
factor
impacting
on
the
value
of
the
US
Dollar
is
monetary
policy,
which
is
shaped
by
the
Federal
Reserve
(Fed).
The
Fed
has
two
mandates:
to
achieve
price
stability
(control
inflation)
and
foster
full
employment.
Its
primary
tool
to
achieve
these
two
goals
is
by
adjusting
interest
rates.
When
prices
are
rising
too
quickly
and
inflation
is
above
the
Fed’s
2%
target,
the
Fed
will
raise
rates,
which
helps
the
USD
value.
When
inflation
falls
below
2%
or
the
Unemployment
Rate
is
too
high,
the
Fed
may
lower
interest
rates,
which
weighs
on
the
Greenback.
In
extreme
situations,
the
Federal
Reserve
can
also
print
more
Dollars
and
enact
quantitative
easing
(QE).
QE
is
the
process
by
which
the
Fed
substantially
increases
the
flow
of
credit
in
a
stuck
financial
system.
It
is
a
non-standard
policy
measure
used
when
credit
has
dried
up
because
banks
will
not
lend
to
each
other
(out
of
the
fear
of
counterparty
default).
It
is
a
last
resort
when
simply
lowering
interest
rates
is
unlikely
to
achieve
the
necessary
result.
It
was
the
Fed’s
weapon
of
choice
to
combat
the
credit
crunch
that
occurred
during
the
Great
Financial
Crisis
in
2008.
It
involves
the
Fed
printing
more
Dollars
and
using
them
to
buy
US
government
bonds
predominantly
from
financial
institutions.
QE
usually
leads
to
a
weaker
US
Dollar.
Quantitative
tightening
(QT)
is
the
reverse
process
whereby
the
Federal
Reserve
stops
buying
bonds
from
financial
institutions
and
does
not
reinvest
the
principal
from
the
bonds
it
holds
maturing
in
new
purchases.
It
is
usually
positive
for
the
US
Dollar.