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19.07.2023 Market Report


EUR/USD remains pressured toward 1.1200, as the US Dollar pauses its run of losses. Upbeat US Core Retail Sales growth joins mixed ECB signals and worsening mood to prod EUR/USD bulls so far this Wednesday. 


GBP/USD came under strong bearish pressure and dropped to a fresh weekly low below 1.3000 in the European session on Wednesday. The data from the UK showed that the annual CPI fell sharply to 7.9% in June from 8.7% in May, weighing heavily on Pound Sterling.


USD/JPY buyers cheer the risk-on mood, as well as the US Dollar’s rebound, as it renews the weekly top around 139.50 amid the early hours of Wednesday’s European session. In doing so, the Yen pair justifies dovish concerns about the Bank of Japan (BoJ) while ignoring downbeat Treasury bond yields and chatters about the US Federal Reserve’s pause in rate hikes after July.


The AUD/USD pair loses traction and holds ground above the 0.6790 mark heading into Wednesday’s European session. The major pair currently trades around 0.6795, down 0.24% for the day. Investors digest the Reserve Bank of Australia (RBA) meeting minutes and monitor Sino-US relations. Following the softer US inflation data and easing labour market conditions, market players anticipate that the Federal Reserve (Fed) is nearing the end of its policy tightening cycle and will maintain interest rates following the widely expected 25 basis points (bps) in the July meeting. According to the CME Group FedWatch Tool, markets have nearly fully priced in a 25 basis point Fed rate hike in July.


NZD/USD trims the first daily gains in four around 0.6285 amid Wednesday’s mid-Asian session, following a quick run-up to 0.6334 marked earlier in the day. That said, the Kiwi pair’s latest weakness could be linked to the US Dollar’s ability to defend the previous day’s corrective bounce off the multi-month low, as well as sluggish markets. However, the better-than-forecast inflation data from New Zealand (NZ) put a floor under the Kiwi pair.


USD/CAD remains dicey around 1.3170-80 during early Wednesday morning in Europe, despite pausing a two-day downtrend, as market players seek more clues to defend the Loonie pair buyers amid a sluggish Asian session. That said, the downbeat prints of Canada’s headline inflation numbers contrast with upbeat details of the US Retail Sales, as well as a pullback in WTI Crude Oil, the biggest Canadian export earner, to lure the USD/CAD buyers. However, risk-on mood and dovish Fed concerns seem to prod the Loonie pair’s upside momentum of late.


The USD/CHF pair oscillates in a narrow trading band, around the 0.8575-0.8580 region through the Asian session on Wednesday and consolidates its recent downfall to the lowest level since January 2015 touched the previous day. The prevailing risk-on environment is seen undermining demand for the safe-haven Swiss Franc (CHF) and turning out to be a key factor lending some support to the USD/CHF pair. The weaker economic data from China this week fueled speculations about the possibility of more stimulus measures from the government. This, to some extent, helps ease concerns over slowing economic growth in China and boosts investors’ confidence, which led to the recent rally across the global equity markets.


Global oil prices retreated on Wednesday, after opening higher at the start of Asian trade, as markets weighed U.S. demand concerns against China’s pledge to support economic growth, tighter Russian supply and declining U.S. inventories.


Gold Price (XAU/USD) remains on the back foot around the intraday low as it reverses from the highest levels in eight weeks amid the US Dollar’s sustained recovery from a 15-month low. 

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