Market Drivers – US Session – Monday, July 25

Mohamed Abdelhamid 26 July, 2022 3:33 am Commodities, Forex Market, Global Stock Market, Market Update

This week’s trading started amid lower risk appetite although the better performance of US equities has weighed on the US dollar since the European session.

The lack of news was perfectly good news for high-yielding currencies. The GBP/USD pair trades at around 1.2050, while AUD/USD nears July high at 0.6977. On the other hand, the USD/CAD pair is down to 1.2840.

The dollar advanced modestly against safe-haven rival currencies. The USD/CHF pair stands at 0.9640 while USD/JPY trades around 136.60. Gold price eased now, trading at around $1,717 a troy ounce. Crude oil prices were marginally higher, with WTI now trading at $96.60 a barrel.

Economic Data

The headline German IFO Business Climate Index retreated to 88.6 in July versus last month’s 92.2 and the consensus estimates of 90.5. Current Economic Assessment dropped to 97.7 points in the reported month as compared to June’s 99.4 and 98.2 anticipated.

Dallas Fed Manufacturing Index sharply fell again in July. The US Dollar Index received the news by trimming daily losses, and rises to 106.50.

The General Business Activity Index of the Federal Reserve Bank of Dallas’s Manufacturing Survey retreated to -22.6 in July from -17.7 in June. This reading missed the market expectation of -12.5 by a wide margin.

New Orders sub-index dropped to -9.2 from -7.3, the Prices Paid for Raw Materials component fell to 38.4 from 57.5 and the Employment sub-index rose to 17.9 from 15.2.

Other Developments

Earnings reports and hopes that the US Federal Reserve will refrain from innovating on monetary policy partially offset concerns about a global recession.

The Euro was one of the worst performers, as tepid European data weighed on the shared currency. The latter also suffered from persistent tensions with Russia. The Nord Stream 1 pipeline is flowing at around 20% of its full capacity, and Europe will not have enough natural gas to make it throughout the winter. The pair trades around 1.0220, little changed for a second consecutive day.

The macroeconomic calendar has very little to offer until next Wednesday. The US Federal Reserve monetary policy decision will be number one on the event list, but initial GDPs and inflation figures for different economies will also be out.

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