Review of the dollar, euro, pound, yen, aussie and gold prices for July 19, 2021


The European currency is flat against the US dollar during the Asian session, consolidating around 1.1800 and waiting for new drivers to appear on the market. The decline in the euro at the end of last week was triggered by the emergence of fairly strong macroeconomic statistics from the United States. At the same time, the bidders ignored the next speech by the head of the US Federal Reserve, Jerome Powell, where he noted that “the time has not yet come for the reduction of incentives.” Anyway, on Friday, the buying sentiment for the dollar was supported by strong data on the dynamics of retail sales. In June, the indicator rose by 0.6% mom after declining by 1.7% mom in May. Analysts had expected a fall of 0.4% m / m. Excluding car sales, the same indicator added a record 1.3% mom after falling by 0.9% mom. Market forecasts assumed only + 0.4% m / m. The focus of investors’ attention today will be the monthly report from the Bundesbank.


The British pound is trading with a downward trend against the US currency in the morning session, developing a strong “bearish” momentum, formed at the end of last week. The pound is losing ground to the dollar as cautious sentiment prevails on the market again. Bidders hope for further acceleration in the global economy, but are alarmed by the rise in coronavirus cases. Against this backdrop, on July 19, the UK authorities begin the final reopening of the economy, assuming that the population will be protected from the explosive growth in hospitalizations and deaths thanks to an active vaccination campaign. According to official London, about 67% of UK residents are vaccinated with at least one component of the vaccine, but the latest statistics indicated that the daily increase in incidence of the disease exceeded 50 thousand for the first time in six months. Some pressure on the position of the pound today is exerted by the macroeconomic statistics from the UK. Thus, the house price index from Rightmove in July slowed down from + 0.8% m / m to + 0.7% m / m. In annual terms, the indicator fell from 7.5% y / y to 5.7% y / y.


The Aussie has been trading down against its greenback during the Asian session, hitting record lows since December 7, 2020. The US dollar continues to gain momentum, despite the fact that macroeconomic statistics and statements by officials do not always contribute to the growth of “bullish” sentiment. In particular, last Friday the market received statistics on the dynamics of consumer confidence from the University of Michigan. In July, the indicator unexpectedly fell from 85.5 to 80.8 points, while analysts expected it to rise to 86.5 points. Last week, the head of the US Federal Reserve Jerome Powell made a speech, who noted that the American economy still needs incentives, and therefore the regulator will not rush to reduce the quantitative easing program, as well as to raise the interest rate. Macroeconomic background on Monday remains quite calm, so trading activity is likely to remain low.


The US dollar shows a slight decline against the Japanese yen in trading in Asia, again trying to gain a foothold below 110.00, near which the instrument has been trading since July 8. The American currency is in high demand in the market, as risky assets have again become dependent on the alarming epidemiological situation in the world. However, buying sentiment on the dollar has weakened somewhat after the statements of the head of the US Federal Reserve Jerome Powell last week that there is no need to rush to reduce stimulus measures at the moment. The market also reacted to a sharp drop in consumer confidence (according to a report from the University of Michigan). Investors are still playing out the decision of the Bank of Japan to keep the interest rate unchanged. In addition, the Japanese regulator lowered its GDP forecasts for 2021 from 4% y / y to 3.8% y / y. In the coming years, the Bank of Japan, on the contrary, expects economic growth to accelerate.


Gold prices show corrective growth in the morning session trading, slightly recouping after a sharp decline last Friday, which did not allow the instrument to renew local maximums since June 16. Apart from a number of technical factors, the reason for the emergence of “bearish” dynamics was the strengthening of the dollar and the growth in the yield of Treasury bonds. It is curious that this happened against the backdrop of extremely disappointing macroeconomic statistics from the US on the dynamics of consumer confidence in July. The only favorable moment for gold was the reluctance of the US FRS to react to the rapidly growing inflation. Last week, the head of the regulator Jerome Powell reiterated that the time to cut incentives has not yet come.

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