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The White House memo (noting that US macroeconomic data, including the June jobs report, are not consistent with a recession) was a good attempt to improve market sentiment. The document added that “labour market strength puts the US in a better position than many other countries to transition to lower inflation and steady growth.”
The US dollar wasted some of its momentum ahead of Wall Street’s opening hour, forsaking some of its gains to end of the trading day.
Commodity-linked currencies managed to recover but had to trim some gains ahead of the close, following Wall Street’s slump. The AUD/USD pair trades around 0.6750, while USD/CAD hovers in the 1.3020 price zone.
Safe-haven currencies appreciated against the US dollar, with USD/CHF trading at 0.9810 and USD/JPY at 136.80.
Gold is near a fresh 2022 low of $1,723.15 per ounce and seems poised to extend its fall. Crude oil prices edged firmly lower, with WTI now trading at $95.50 a barrel.
Economic Data
The focus is now on inflation as Germany, and the US will release updates on their respective Consumer Price Indexes. German annual inflation is expected to be confirmed at 7.6% in June, while US one is foreseen to jump to 8.8%, a new multi-decade record.
Other Developments
The GBP/USD pair traded at 1.1806 on the backdrop of the UK current political crisis. BoE Governor Andrew Bailey said there are alternatives to 25 bps rate hikes in the table, adding he expects inflation to fall sharply next year.
Risk aversion amid slowing economic growth and soaring inflation remained the main theme across financial markets. The American currency appreciated throughout the first half of the day, reaching fresh 20-year highs against the EUR, as the pair touched 0.9999.
US indexes bounced with the news but turned red ahead of the close, and as investors await US inflation figures scheduled for Wednesday.
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