The Greenback has made a strong comeback after hitting 14-month lows, causing significant movement in the risk market ahead of key data releases and a speech by Chair Powell. The US Dollar Index (DXY) saw a notable rise after hitting new 2024 lows around 100.20. This comes as final Q2 GDP Growth Rate figures, weekly Initial Jobless Claims, Durable Goods Orders, and Pending Home Sales are set to be released. Additionally, several Fed officials, including Chief Powell, are scheduled to speak.
EUR/USD was unable to break above the 1.1200 level and eventually fell victim to the Dollar’s strong reversal. The German GfK’s Consumer Confidence data and the ECB’s M3 Money Supply figures are expected. Several ECB officials, such as Elderson, Buch, Schnabel, McCaul, and Lagarde, will also deliver speeches.
GBP/USD temporarily rose above 1.3400 but failed to hold onto gains as the Greenback bounced back. Only Car Production data is scheduled for release on the UK calendar. Meanwhile, the strong recovery in the US Dollar and yields prompted USD/JPY to re-test the upper-144.00s, leaving behind two consecutive daily pullbacks. The Bank of Japan will release its Minutes, along with weekly Foreign Bond Investment data.
AUD/USD briefly surpassed the 0.6900 level but experienced a sharp decline following the Dollar’s resurgence. The Reserve Bank of Australia is expected to release its Financial Stability Review (FSR). WTI prices faced pressure, dropping to new four-day lows below the $70.00 per barrel level. Gold hit an all-time high around $2,670 per ounce amid speculation of further rate cuts by the Fed. Silver initially tested recent highs past $32.00 per ounce but later fell due to the strong US Dollar.
In conclusion, the recent resurgence of the US Dollar has caused a significant shift in the forex and commodity markets. Traders are closely watching key data releases and speeches by central bank officials for further direction. The Greenback’s rebound has impacted major currency pairs like EUR/USD and GBP/USD, as well as commodities like Gold and Oil. As the market continues to react to economic data and central bank announcements, volatility is expected to remain high in the coming days.
