Friday, August 4, here is everything you need to know:
After breaking a five-day winning streak on Thursday, the US Dollar remains reasonably calm early on Friday, with the USD Index holding steady at around 102.50. Friday’s European economic agenda includes the release of retail sales figures for June. The US jobs report for July will be released later in the day, and investors will be particularly interested in the Nonfarm Payrolls and pay inflation statistics it contains. Employment statistics from Statistics Canada will also be made public.
Thursday’s initial decline in the major Wall Street indexes was followed by a modest gain before the day’s end. While market sentiment did improve slightly, the USD rise stalled due to conflicting macroeconomic data from the United States. U.S. stock index futures are trading higher on a Friday morning, indicating a generally optimistic mood.
It is anticipated that the US labor market will remain stable when the July NFP report is released.
Initial Jobless Claims for the week ending July 29 came in at 227,000, in line with market expectations, and factory orders in the United States grew 2.3% in June. July’s ISM Services PMI reading was slightly below 50, but still above the neutral 50 mark; nevertheless, the survey’s Employment Index dropped to 50.7 from 53.1, signaling a slowdown in job growth in the service sector.
The euro/dollar exchange rate recovered from its Thursday low and settled at approximately 1.0950 early Friday. factory orders in Germany rose by 7% in June, smashing the market expectation of a 2% drop. this news came earlier in the day.
On Thursday, the value of the pound against the dollar dropped to 1.2622, its lowest point in more than a month, before rising above 1.2700. A 25-basis-point (bps) increase in BoE’s policy rate to 5.25% was widely anticipated. The British pound fell in value versus its rivals in European trading on Thursday after BoE Governor Andrew Bailey refused to commit to further rate hikes in a press conference following the meeting.
In the latest quarterly Monetary Policy Statement (MPS), released on Friday, the Reserve Bank of Australia (RBA) cut inflation and growth expectations. According to the RBA’s report, further policy tightening could protect against inflationary pressures. Barley import tariffs from Australia will be eliminated in China as of August 5th, according to a statement released by the country’s Commerce Ministry on Friday. As a result of these changes, the AUD/USD exchange rate has been slowly climbing and was last seen trading at over 0.6550, where it is in the green.
Thursday saw a decline of roughly 100 pips in USD/JPY as the pair trended south. Early on Friday, the pair continues to trade over 142.50.
Thursday’s continuing Dollar weakness was not enough to help the XAU/USD pair, as the benchmark 10-year US Treasury bond yield kept rising above 4.1%. Overnight in Europe, gold has been trading at around $1,930.