Forex Daily Recap – US Dollar Index Descended to a Three-Month BottomWednesday’s Fed rate cut hints on “an accommodative” stance continued to weigh over the Index. German June Markit Manufacturing PMI reported above estimates. The USD/CAD pair was showing some slight recovery movements throughout the day.
At around 19:33 GMT, the Greenback was taking rounds near its three-month bottom. The USD Index was pushed off the cliff from about 97.64 levels on June 19. The Index kept a follow-through of the pullback sessions reaching 96.17 levels today. Wednesday’s Fed rate cut hints on “an accommodative” stance continued to weigh over the Index. Reports suggested a Fed rate cut would mostly happen in the near term by July. The US economic docket also failed to provide some significant support to the stumbling USD Index. The US June Markit Services PMI came out 0.3 points lower than the 51.0 forecasts.
Meanwhile, the May MoM Existing Home Sales data published higher-than-expected reports. The Existing Home Sales data had reported around 5.34 million over 5.25 million estimates. Somehow, the Greenback appeared to ignore these positive data and continued the downtrend.
The Loonie pair appeared to shrug over the plummeting Greenback and rising Oil prices today. The USD/CAD pair was showing some slight recovery movements throughout the day. After marking the day’s opening near 1.3183 levels, the pair touched the day’s high near 1.1328 levels. At around 12:30 GMT, the Canadian April MoM Retail Sales data missed estimates. The market had expected the Retail Sales data to come around 0.2%. However, the actual statistics quoted 0.1% below the forecasts. Adding to this sour sentiment, the Retail Sales excluding Autos reported 0.3% over 0.1% estimates. Meantime, Baker Hughes US Oil Rig Count came near 789 over the last 788. This Crude report revealed a minor increase in the Stockpiles, showing a decline in the demand side. Amid escalating US-Iran tensions, the Crude prices skyrocketed knocking off the highest point near $57.97 bbl.
After quoting the day’s opening near 1.2706 level, the Cable displayed a sharp pullback reaching 1.2643 level. These earlier losses got recovered in the rest half of the day marking daily high near 1.2747 level. The extra energy in the pair’s rigorous movements came out of the falling Greenback. The USD Index had touched the bottom near 96.50 levels in today’s session.
Last day, the BoE had left the monetary policy unchanged as per expectation. The Central Bank continued to remain in-line over its May Inflation report. However, the Bank mentioned that it would consider all possible downsides occurring due to various global cues. The Bank has also reduced its Q2 growth forecast from 0.2% QoQ to 0.0% QoQ. Hence, as compared to other Central Banks, BoE’s stance appeared to be lesser dovish. On the UK politics front, Boris Johnson continued to stay ahead of the Tory leadership race.
The Euro pair that had opened up on Monday near 1.1217 levels was hovering near 1.1371 levels today. The EUR/USD pair continued to conquer new heights on Friday’s session majorly over Greenback slowdown. The USD Index was trading near its three month low amidst rate cut hopes. On the events front, France, German, and the Eurozone showcased some astounding reports. The market had anticipated the German June Markit Manufacturing PMI to report 44.5 over the previous 44.3. Quite surprisingly, the actual reports came more than the estimates, recording 45.4. Also, the Eurozone June Markit PMI Composite reported above the market expectation. There was hardly any downside observed in the pair’s movements today and kept the uptrend intact.