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Hello everyone, today XM Forex will bring you "[XM Group]: The US dollar consolidates the Fed's increase, and the Bank of Japan stimulates the yen to strengthen." Hope it will be helpful to you! The original content is as follows:
On July 31, the US dollar (USD) pulled lower after strengthening against other currencies on Wednesday, supported by strong data releases and the Federal Reserve's cautious tone for policy easing. The European Economic Calendar will include the initial inflation data for Germany in July and the euro zone unemployment rate for June. In the second half of the day, market participants will closely monitor the number of people applying for unemployment benefits per week and personal consumption expenditure (PCE) price index data.
The U.S. dollar index rose 1% on Wednesday, hitting its highest level in two months around 100.00. The U.S. Bureau of Economic Analysis's first estimate shows that the U.S. gross domestic product (GDP) grew at an annual rate of 3%. This figure stofoco.comes after a 0.5% contraction reported in the first quarter and surpassed market expectations of a 2.4% expansion. Additionally, Automatic Data Processing (ADP) announced that private sector employment increased by 104,000 in July, surpassing analysts’ expectations of 78,000.
Later that day, the Federal Reserve maintained its policy interest rate in the range of 4.25%-4.5% as expected. The policy statement shows that Governor Christopher Waller and Governor Michelle Bowman voted in favor of a 25 basis point cut (bps). At a post-conference press conference, Fed Chairman Jerome Powell did not confirm the rate cut in September on the grounds of uncertainty in the inflation outlook. Furthermore, Powell acknowledged that the current policy is still modestly restrictive, but added that it did not hinder the economy.
The Bank of Japan (BoJ) announced on Thursday that as expected, it will maintain its short-term interest rate target in the range of 0.40%-0.50%. JapanIn its policy statement, the bank reiterated that there is a high degree of uncertainty in the development of trade policy and its impact on the economy, adding that if the economy and price trends meet their forecasts, they will continue to raise policy interest rates. The European session fell and fell below 149.00 on Thursday after the US dollar/yen climbed to its highest level since early April late Wednesday to above 149.50.
The USD/Canada rose about 0.5% on Wednesday, closing in the positive zone for the fifth consecutive day. The Bank of Canada has stabilized its policy interest rate at 2.75%, and Bank of Canada Governor Tiff Macklem said they will ensure that the tariff issue does not turn into an inflation issue. The U.S. dollar/Canada fell slightly earlier on Thursday, but managed to hold above 1.3800.
Euro/USD fell more than 1% on Wednesday, trying 1.1400. The pair rebounded in early European trading and traded in an active area around 1.1450.
Gold gained momentum in the European session on Thursday, trading at just over $3,300.
Oil prices did not change much on Thursday, with Brent crude oil futures for September delivery falling 0.19% to $73.1 per barrel, and the contract will expire on the same day; US WTI crude oil futures remained flat in September at $70.01 per barrel. More active October Brent futures fell 0.14% to $72.37 a barrel.
Euro: The intraday bias of the euro/dollar is still in a downward trend. The decline from 1.1829, as a correction to rebound from 1.0176, the 38.2% retracement of 1.0176 was at 1.1829, at 1.1198. On the plus side, a small resistance above 1.1571 will turn neutral and will first bring consolidation and then fall again.
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