Wednesday July 31st , 2024

We start the trading day with the USD trading lower while equities, oil and treasury yield are moving higher. The Fed interest rate decision day is finally upon us, while expectations are that the Fed will keep rates stable the focus will be in the policy statement and press conference. Expectations are that the Fed will acknowledge the progress on inflation and growing risks to the labor market strength. Important to note that the US employment figures are set to be released on Friday.

In other news.?Israel claims it killed senior Hezbollah commander responsible for the rocket attack that killed 12 people, mostly children on the weekend. The killing of Haniyeh in Iran raises fear of an escalation in tension. Iran's Supreme Leader said Israel had provided the grounds for "harsh punishment for itself" and it was Tehran's duty to avenge the Hamas leader's death. Fresh protests have broken out in the Venezuelan capital, Caracas, after the disputed result of the country's presidential election. President Biden and Brazilian President Lula da Silva said Sunday's Venezuelan election is a "critical moment for democracy" and pledged to closely coordinate a response.

?

In currency news. The BoJ raised interest rates in a mostly unexpected move on Wednesday and unveiled a detailed plan to slow its massive bond buying, taking another step towards phasing out a decade of huge stimulus. BoJ Governor has not ruled out another hike in 2024. China's yuan firms with yen as Politburo signals more stimulus measures. The ZAR strengthened, ahead of a much-anticipated policy decision by the Fed. The USD is trading lower against most Asian currencies, it’s down 1.7% against the JPY, -0.45% CNY, -0.61% MYR, -0.67% THB. The AUD and NZD are moving in different direction with the AUD losing 0.64% and the NZD gaining 0.15% against the USD. In the trading currencies, the ZAR gained 0.6% against the greenback while the MXN lost 0.36%.

?

In commodity markets.?Oil futures rebounded from 7-week lows after the killing of a Hamas leader in Iran ratcheted up tensions in the Middle East. Gold prices rose 0.7%, heading for a monthly gain (+/- 4%) on the back of growing optimism about U.S. interest rate cuts and the continued unrest in the Middle East. Silver followed suit gaining 0.9%. Wheat remains under pressure on advancing U.S. harvest and cheap Russian exports, while Soy hovers near October 2020 low on weak demand and beneficial weather.

Current level USD Index???????????????104.222 ? ? ? ? ? ?Down 0.32%

The USD/CAD still hovers near its 8-month high despite the move up in oil prices related to geopolitical tension and the overall USD weakness. All eyes on the Fed’s decision.

Current level USD/CAD???????????????1.3842???????????? Down 0.04%

?

The EUR/CAD seems to be taking a breather after a strong run up in July near its 6-month high.

Current level EUR/CAD????????????????1.4990??????????? Up 0.10%

?

The EUR/USD paid little attention to the mixed Eurozone inflation report

Current level EUR/USD????????????????1.0828??????????? Up 0.12%

?

The GBP/EUR remains in a tight range ahead of the Fed and BoE interest rate decision.

Current level GBP/EUR???? 1.1851 (0.8437)????????Down 0.12%

?

The GBP/USD remains in a tight range as the pair consolidates focusing on interest-rate decisions by Fed and the BoE on Wednesday and Thursday, respectively.

Current level GBP/USD????????????????1.2856 ???????????Down 0.02%

?

?