EURUSD
- The EUR/USD remained steady this morning, trading around 1.0920, following a decline of 0.45% on Wednesday.
- ECB President Christine Lagarde commented that underlying inflation in the euro zone is still considered too high and there is insufficient evidence to indicate a downward trajectory.
- The U.S. dollar gained slight strength in the early European session on Thursday, building upon previous day's advances, as Fed Chair Jerome Powell reiterated the likelihood of further interest rate increases. Hawkish signals from central bank leaders at the European Central Bank's annual gathering in Sintra contributed to the dollar's strength.
- Today, the release of another reading of the first quarter's gross domestic product (GDP) growth in the United States is expected, with forecasts pointing to a 1.4% increase.
- Market participants continue to monitor statements and actions from central bank officials, particularly those from the ECB and the Federal Reserve, as they provide indications of future monetary policy decisions and potential impact on the EUR/USD exchange rate.
| SMA (20) | Slightly Rising |
| |
| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Neutral |
Closing statement: The EUR/USD remained relatively unchanged, trading around 1.0920, as ECB President Christine Lagarde highlighted concerns about underlying inflation in the euro zone. The U.S. dollar saw some gains, bolstered by the hawkish sentiments expressed by central bank leaders. Attention remains on the release of the U.S. GDP growth figures and ongoing developments in central bank communications.
GBPUSD
- The GBP/USD pair showed a slight increase of 0.1%, reaching $1.2648, following a significant 0.88% decline in the previous session.
- Bank of England Governor Andrew Bailey hinted at the possibility of further interest rate hikes, even after the surprise 50-basis-point increase implemented by the bank earlier this month.
- The U.S. dollar index, which measures the dollar against a basket of six major currencies, remained steady after a previous gain of 0.22% to 103.20. This extended the overnight climb of 0.46%.
- During his speech at the ECB conference, Federal Reserve Chair Jerome Powell stated that he does not anticipate inflation reaching the Fed's 2% target until 2025. This statement supports the notion that interest rates may remain elevated for an extended period.
- Market participants are closely monitoring the statements from central bank officials, including those from the Bank of England and the Federal Reserve, as they provide insights into future monetary policy decisions and their potential impact on the GBP/USD exchange rate.
| SMA (20) | Rising |
|
|
|
| RSI (14) | Neutral | |||
| MACD (12, 26, 9) | Slightly Falling |  |
Closing statement: The GBP/USD pair experienced a slight uptick, reaching $1.2648, as Bank of England Governor Andrew Bailey hinted at the possibility of further interest rate hikes. The U.S. dollar remained steady, and Federal Reserve Chair Jerome Powell's comments on inflation reinforced expectations of sustained higher interest rates. Traders continue to focus on central bank communications for guidance on future monetary policy actions.
GOLD
- Gold prices traded at three-month lows on Thursday as the dollar and Treasury yields gained strength following Federal Reserve Chair Jerome Powell's indication of potential interest rate hikes.
- During a panel discussion with ECB President Christine Lagarde, Bank of Japan Governor Kazuo Ueda, and Bank of England Governor Andrew Bailey, Powell stated that two rate increases were likely this year, leaving open the possibility of a hike in July.
- Two significant data points, the release of the personal consumption expenditures index (Fed's preferred inflation gauge) and the June jobs report, are scheduled for Friday and the end of next week, respectively. These data will be crucial for policymakers to consider at the July meeting.
- The rise in U.S. interest rates negatively affects gold and other metals since it increases the opportunity cost of holding non-yielding assets.
- Market participants are closely monitoring the developments in interest rates, inflation indicators, and economic data, as they influence gold prices and shape the outlook for XAU/USD.
Closing statement: Gold prices traded at three-month lows due to the strengthening dollar and Treasury yields following Jerome Powell's remarks on potential interest rate hikes. The upcoming release of key economic data, including the personal consumption expenditures index and the June jobs report, will play a significant role in shaping policy decisions at the July meeting. Rising U.S. interest rates continue to pose challenges for gold and other metals. Traders are closely observing these factors to gauge the future direction of XAU/USD.
CRUDE OIL
- Crude oil prices remained within a narrow range in Asian trade on Thursday, holding onto strong gains from the previous session. Traders are eagerly awaiting key economic data from the United States and China for further market direction.
- The rally in oil prices on Wednesday was triggered by data revealing a larger-than-expected drawdown in U.S. inventories. This, coupled with expectations of increased demand during the summer season, has provided support to the markets amid tightening supply conditions.
- Economic indicators from China are also anticipated to play a significant role in influencing crude oil markets this week. As the world's largest oil importer, China's post-COVID economic rebound and any signs of a slowdown will impact market sentiment.
- The upcoming meeting of the Organization of the Petroleum Exporting Countries (OPEC) is in focus as well. The cartel has implemented surprise production cuts this year to stabilize oil prices, and market participants are keen to observe any further decisions or announcements from OPEC.
- Traders and investors are closely monitoring the interplay between supply and demand dynamics, economic data releases, and OPEC's actions, as they shape the outlook for crude oil prices in the near term.
| SMA (20) | Slightly Falling | |
|
| RSI (14) | Slightly Rising |
|
|
| MACD (12, 26, 9) | Neutral |
Closing statement: Crude oil prices remained range-bound in Asian trade, reflecting the lingering impact of a substantial drawdown in U.S. inventories and anticipation of upcoming economic data from China. The OPEC meeting next week adds further intrigue to the market, following the cartel's surprise production cuts. Market participants continue to assess supply-demand dynamics and global economic indicators for insights into the future direction of crude oil prices.
DAX
- Germany stocks closed higher on Wednesday, with gains led by the Software, Technology, and Transportation & Logistics sectors, boosting overall market performance.
- The DAX index in Frankfurt recorded a gain of 0.64%, while the MDAX index rose by 1.21%, and the TecDAX index increased by 1.57%.
- The possibility of a rate hike by the European Central Bank (ECB) in July appears increasingly likely. Recent data from Germany's most populous state, North Rhine Westphalia, showed a monthly consumer price increase of 0.3% in June and an annual rise of 6.2%, surpassing last month's 5.7%.
- Among the top performers on the DAX, Siemens Energy AG saw a notable increase of 6.74%, or 0.99 points, closing at 15.67. Sartorius AG VZO O.N. gained 3.77%, or 11.00 points, ending at 302.90, while Rheinmetall AG rose 2.59%, or 6.30 points, to 249.10 in late trade.
- On the other hand, Zalando SE experienced a decline of 5.76%, or 1.60 points, closing at 26.20, making it one of the worst performers during the session. Covestro AG also saw a decline of 3.27%, or 1.62 points, ending at 47.90, while Siemens AG Class N dropped by 3.07%, or 4.84 points, to 152.72.
| SMA (20) | Slightly Rising |
|
| RSI (14) | Neutral | |
| MACD (12, 26, 9) | Neutral |
Closing statement: Germany's DAX index closed higher, driven by gains in the Software, Technology, and Transportation & Logistics sectors. The possibility of an ECB rate hike in July gained further traction with strong consumer price data from the state of North Rhine Westphalia. Siemens Energy AG and Sartorius AG VZO O.N. emerged as top performers, while Zalando SE and Covestro AG struggled during the session.