What you need to take care of on Friday, July 8:
Financial markets were quieter on Thursday as risk-aversion paused, limiting the dollar’s strength. Global indexes closed in the green, although US Treasury yields soared as the focus remained on recession prospects.
The EUR/USD pair fell to a fresh 20-year low of 1.0143, pressured by the soft German data and the European Central June meeting Accounts. The Governing Council agreed it needed to preserve its credibility “by showing its resolve.” Some members still wanted to keep the door open for a larger rate hike in the July meeting, although President Christine Lagarde affirmed multiple times the hike would be 25 bps.
GBP/USD settled at 1.2020, helped by Prime Minister Boris Johnson’s resignation. Following two days of political turmoil, Johnson finally stepped back as Conservative Party leader. He will remain in his charge until September when a replacement will be announced.
Commodity-linked currencies gained against the greenback, helped by the positive tone of equities. AUD/USD trades around 0.6840, while USD/CAD is down to 1.2970.
Crude oil prices were up, although modestly. The barrel of WTI is trading at $102.60 a barrel. US gas prices skyrocketed after the release of the EIA stocks report.
The greenback advanced vs the Swiss Franc, with the pair now at 0.9740. The USD/JPY pair remained within familiar levels, now trading at 136.00.
Overall, concerns about inflation and slowing economic growth remained as the main market motor. There are no changes to the gloom outlook, and risk aversion can soon return.
The focus on Friday will be on the US Nonfarm Payrolls report.
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