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By xemarketanalysis July 4, 2018 1:32 pm
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    XE Market Analysis: Independence Day Keeps the Market on Hold


    • Markets have retreated into tight ranges for the US holiday.
    • Divergence in UK/EU PMI data propels GBP/EUR higher.
    • Stocks head lower back to the bottom end of recent range.


    CNY rose sharply this morning after the Chinese central bank offered reassurance that it would intervene in markets to maintain stability amid escalating trade tensions with the US. June was the Yuan's worst month in history.


    The USD has given up ground against most of the majors throughout the day in thin conditions due to the US 4th of July holiday. Markets now await Friday's Non-Farm Payrolls report.


    UK services PMI printed at its highest reading for 8 months, sending GBP higher and strengthening the case for a rate hike in August. Markets are currently pricing an 88% chance of a 0.25% hike by the end of the year, and a 53% chance of a move at the August meeting. 


    The Euro is lower on the day after data showed Eurozone purchasing manager optimism at its lowest levels since 2016.


    CAD has drifted modestly higher, buoyed by better than expected manufacturing data, and supported by firmer oil prices overnight. The Bank of Canada is widely expected to raise rates to 1.50% at its next meeting on July 11th.


    After printing at 9-day highs early in the session, the Aussie has come under renewed pressure as copper prices fell to fresh 9-month lows.


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