Review of the dollar, euro, pound, yen, aussi and gold prices for July 8, 2021


The European currency shows the flat dynamics of trading against the US dollar during the Asian session, consolidating near the local lows since April 5, updated the day before. The euro was again under pressure from the weak macroeconomic statistics from Germany on industrial production, as well as the data on business activity released on Tuesday. Thus, by the end of May, the volume of industrial production decreased by 0.3% m / m, repeating the dynamics of April. Forecasts assumed growth of 0.5% m / m. On an annualized basis, production volumes slowed sharply from + 27.6% y / y to + 17.3% y / y, which also turned out to be worse than expected at + 34.5% y / y. Investors are somewhat concerned about the pace of recovery in Europe’s largest economy, but they are in no hurry to redirect their capital to other currencies. The focus of market participants today is the speech of the head of the European Central Bank (ECB) Christine Lagarde, who may clarify the regulator’s plans to tighten monetary policy in the near future.


The British pound declines against the US dollar in the morning session, again trying to gain a foothold below 1.3800. The American currency has moved to an upward trend, however, the current growth is largely due to technical factors only. The minutes of the US Federal Reserve meeting published yesterday reflected the previous mood of the department officials. The regulator will not rush to tighten monetary policy based only on inflation data, which continues to be considered only a “temporary phenomenon”. The recovery of the labor market is coming to the fore, as before, and the indicators of full employment are still a long way off. In turn, the data from the UK put moderate pressure on the pound yesterday. Thus, the house price index from Halifax in June slowed down from + 9.6% 3m / y / y to + 8.8% 3m / y / y. On a monthly basis, the index fell 0.5% mom after rising 1.2% mom in May. Market forecasts assumed an increase of 0.8% m / m.


The Australian dollar is developing bearish against the US currency during the Asian session, testing the 0.7450 mark for a breakdown. The instrument is again approaching the local minimums, updated on July 2, despite the rather vulnerable positions of the US dollar. In particular, the day before, the American currency underwent sales after the publication of the minutes of the US Federal Reserve meeting, which reflected the unwillingness of the regulator to rush to tighten monetary policy. The Australian dollar, in turn, at the beginning of the week played out the decision of the Reserve Bank of Australia (RBA) to gradually reduce the volume of the quantitative easing program, but this did not provide significant support to the instrument. The additional pressure on the pair AUD / USD yesterday was exerted by weak data from Australia. Thus, the index of activity in the service sector from AiG in June fell from 61.2 to 57.8 points.


The US dollar is falling against the Japanese yen in trading in Asia, still holding close to local lows since June 22 and testing the 110.50 mark for a downward breakdown. The American currency received a new impetus to sales after the publication of the minutes of the US Federal Reserve meeting the day before, which, as expected, reflected the regulator’s wait-and-see attitude on the issue of reducing the existing incentives. In addition, officials of the department expect a gradual return of inflation to the target level of 2%. In turn, the further growth of the yen is hindered by not the most confident macroeconomic statistics from Japan. Thus, the data released the day before reflected a decrease in the index of coincident indicators in May from 95.3 to 92.7 points with the forecast of a decrease to 95.1 points. The index of leading indicators for the same period fell from 103.8 to 102.6 points, which also turned out to be worse than expected at 103.5 points.


Gold prices returned to their decline during the Asian session after moderate gains for two sessions in a row, which resulted in renewed local highs since June 17. The instrument was supported yesterday by the published minutes of the US Federal Reserve meeting, which confirmed that the regulator would not rush to tighten monetary policy. The protocols also reflected the previous attitude of the US Federal Reserve towards the rate of inflation, which is being cited as an argument for a faster reduction of the quantitative easing program. Additional support for gold is provided by the yield on 10-year Treasury bonds, which updated record lows over the past 4 months.

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