Market activity is reduced in anticipation of the U.S. inflation ...

Market activity is reduced in anticipation of the U.S. inflation data release in July

Posted on August 11, 2017, 09:13 AM

On Friday, the EUR/USD currency pair is being traded within 20 points ahead of the US inflation data in July. The market acts as if the bulls have taken a breather after the recent recovery and are now looking forward to the data publication for further movement up.

The data on business activity Index combined with the profound comments by the FOMC member Dudley, which were released on Thursday, trimmed American dollar in all directions, keeping the mood of the EUR/USD currency pair relatively buoyant.

With the Europe trading opening, the pair has been consolidated just below 1.18 and further increase can be expected only after the PMI data on consumer prices release, which may be a decisive factor in the US monetary authorities decision on interest rates.

In addition, it is recommended to track the spread on high-yield 10-year bonds in the United States and in Germany, which can also influence the dynamics of the course. We recall that the Euro area inflation in July remains at the same low level of 0.4% m/m and 0.8% y/y.

In the Asian session, the commodity currencies such as the NZ, the Canadian and the Australian dollars weakened considerably against their major partners because since all the major Asian assets have been traded in negative zone on the backdrop of increasing tensions between the U.S. and North Korea, especially after President Trump said that the comments in “Fire and Fury” style of can be not enough.

The future contracts on oil with delivery in September has decreased in price by 0.37% to

$48.21 per barrel. The price fell after the OPEC recognition that in July oil production in the countries of the cartel increased despite the agreement with Russia on the quotas. The cartel continues to produce at a steady pace despite the fact that Saudi Arabia has tried to influence the production level in smaller countries which are OPEC members.

Dmitriy Wainer

NewForex analytics department



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