Review of the dollar, euro, pound, yen, aussi and gold prices for July 22, 2021


The European currency shows a slight increase against the US dollar during the Asian session, developing a weak upward momentum that appeared the day before, and retreating from local lows since April 5. The single currency is supported by technical factors, while investors await the publication of the minutes of the meeting of the European Central Bank (ECB) on the interest rate today. The regulator is likely to continue to develop “dovish” rhetoric after last week its head Christine Lagarde announced the adjustment of the forecasts for rates. Also during the day is expected to publish information on the level of confidence of European consumers in July. The forecast assumes some improvement in the indicator from –3.3 to –2.5 points.


The British pound is showing weak growth against the US currency, consolidating after a sharp rise the day before, which allowed the instrument to retreat from record lows since February this year. The pound was supported by the weak US dollar, while the news background does not contribute to the development of bullish sentiments in the market. Investors are alarmed by the increase in the incidence of coronavirus in the UK, despite the fact that the authorities completely lifted all restrictions related to the pandemic a few days ago. Official London is betting on a high percentage of the vaccinated population, hoping that the number of hospitalizations and deaths will not grow as quickly. Another negative factor for the pound is the issue of the Northern Ireland border, in which the UK and the EU still cannot reach a consensus.


The Aussie has been steadily declining against the US currency during the Asian session, consolidating near 0.7360. The instrument managed to demonstrate a rather noticeable growth the day before, despite the fact that during the morning session the AUD / USD pair hit record lows amid weak data on retail sales in Australia. Thus, sales volumes in June decreased by 1.8% mom after rising by 0.4% mom in May. Analysts expected a 0.5% m / m contraction. Additional pressure on the instrument was exerted by the index of leading economic indicators from Westpac, which fell by 0.06% m / m in June after increasing by 0.04% m / m in May. Today’s data from Australia is driving the downward trend in the AUD / USD pair. Thus, the index of confidence in the business environment of the National Bank of Australia in the 2nd quarter of 2021 decreased from 19 to 17 points with the forecast of growth to 21 points.


The US dollar shows a moderate decline against the Japanese yen in Asian trading, again trading near 110.00. The positions of the US currency remain under pressure as investors are disappointed by the loose monetary policy of the US Federal Reserve. At the same time, the demand for a “safe” dollar is maintained amid an increase in the incidence of new strains of coronavirus, which could undermine the economic recovery. Today, investors will focus on statistics on the dynamics of primary and secondary applications for unemployment benefits. It is expected that for the week of July 16, the number of initial applications will decrease from 360 thousand to 350 thousand. Markets in Japan are closed today to celebrate the Day of Health and Sports.


Gold prices are declining during the morning trading session, again trying to gain a foothold below the psychological level of 1800.00. The day before, the instrument also showed negative dynamics, responding to the strengthening of the US currency and a moderate increase in the yield of Treasury bonds. Gold is still supported by an ambiguous epidemiological situation in the world. In many countries, an increase in the incidence is observed, despite a high percentage of the vaccinated population (for example, in the UK), but so far the trend towards opening up economies prevails in the world, rather than tightening restrictions. In turn, the vector of the US FRS monetary policy remains unchanged. The next meeting of the regulator is to be held next week, however, the head of the department, Jerome Powell, made it clear that the US Federal Reserve is not going to rush to curtail the stimulus. According to the official, the American economy, as before, is in dire need of support.

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