Market Drivers; US Session, July 17

The US Dollar declined to new four-month lows due to additional foreign exchange (FX) intervention by the Bank of Japan (BoJ), stronger expectations of rate cuts, and improved sentiment in risk-related assets.

On Thursday, the European Central Bank (ECB) is likely to keep its policy rates unchanged, with investors closely monitoring President Lagarde’s statements for hints about future rate cuts.

Key events on July 18 include the usual weekly Initial Jobless Claims, Philly Fed Manufacturing Index, CB Leading Index, and Net Long Term TIC Flows. Additionally, the Fed’s Logan is expected to speak.

EUR/USD climbed to multi-week highs around 1.0950 due to Dollar selling pressure. The ECB’s interest rates are expected to remain unchanged.

GBP/USD surpassed the 1.3000 level for the first time since July 2023, and the UK labor market report will be in focus. USD/JPY declined further due to suspected BoJ intervention. Trade balance and weekly foreign bond investment figures will be released.

AUD/USD experienced a third consecutive pullback amid commodity weakness and Chinese demand concerns. The Australian labor market report will be closely watched.

Commodities

WTI crude oil prices rose to three-day peaks near $83.00, driven by a weaker Dollar, geopolitical tensions, and a larger-than-expected drop in US inventories.

Gold reached an all-time high near $2,490 per ounce before a slight correction, while silver declined to two-week lows around $30.00 per ounce.

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