Market Drivers: US Session – July 19

ECB Policy Decision, USD Gains Momentum: The European Central Bank (ECB) adhered to market expectations by leaving its policy rates unchanged. President Christine Lagarde’s remarks also failed to surprise investors. However, the US dollar (USD) regained strength, fueled by rising yields ahead of key Federal Reserve (Fed) speakers scheduled for Friday.

Key Developments:

USD Index Rebounds: The USD Index (DXY) experienced a decent rebound, flirting once again with the 104.00 region. This resurgence was driven by higher US yields across the yield curve. Notably, there were no major data releases on the US economic calendar for July 19. Instead, market participants focused on speeches by Fed officials, including Daly, Bowman, Williams, and Bostic.

EUR/USD Retreats: The selling pressure prompted EUR/USD to give up part of its recent gains, retreating to the 1.0900 neighbourhood. On the same day, the Eurozone’s Current Account results were published, and the ECB released its Survey of Professional Forecasters (SPF).

GBP/USD Faces Resistance: GBP/USD abandoned recent peaks and slid below the key level of 1.3000.
Market attention shifted to UK Retail Sales, Public Sector Net Borrowing, and the GfK Consumer Confidence report, all scheduled for release on July 19.

USD/JPY Strengthens: The sentiment around the Greenback improved, driving USD/JPY higher. The pair surpassed the 157.00 mark. Japan’s Inflation Rate took center stage in the debate, complemented by weekly Foreign Bond Investment figures.

AUD/USD Continues Bearish Trend: AUD/USD declined for the fourth consecutive session, reflecting persistent demand concerns related to China and the broader commodity complex. No significant economic data releases were scheduled for Australia on July 19.

Commodities

Despite ongoing demand concerns and a slowdown in the US economy, WTI crude oil prices managed to edge slightly higher. This followed Wednesday’s gains. Prospects of interest rate cuts by the Fed also influenced market sentiment.

Precious Metals Retreat: Gold prices remained under pressure, retreating further after reaching a record high near $2,490 per ounce troy on Wednesday. Silver followed suit, breaking below the critical $30.00 mark per ounce.

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