Weekly News Review for July, 3-7

EUR/USD Consolidates its Gains after Soft US Economic data

The EUR/USD managed to finish last week of trading almost unchanged. The net EUR/USD buying flows come into the market after the US economy posted some soft readings. The Markit Manufacturing PMI figures come at 52.0 slightly below the market consensus. Factory Orders disappointed for the second straight week posting -0.8% drop. On Thursday the Initial Jobless Claims added 5,000 new people to receive unemployment benefits.

UK Markit Manufacturing PMI Soft Reading Sets the GBP/USD Bearish Tone

The UK Markit Manufacturing PMI dropped to 54.3 for the third consecutive month. This has helped GBP/USD establish the high of the week at 1.3022 during the first trading hours of the week. The general consensus was for the UK manufacturing sector figures to remain unchanged at 56.3, but cooled due to worries over the Brexit political uncertainty.

Aussie in Free Fall After RBA Kept Rates Unchanged

The RBA maintained the benchmark interest rate at record low of 1.5% and the overall dovish tone has sent AUD/USD exchange rate in free fall. The main comments that triggered the Aussie sell off was related to the concerns expressed by the RBA Governor Lowe over higher AUD/USD exchange rates.

The AUD/USD sell off has not produced too much damage to the recent bullish trend and it found support at the 0.7570 level

Subdued Market Reaction to the FOMC Minutes

The FOMC minutes failed to produce any material impact on the FX currency exchange rates. The dollar was seen slightly weakening over the news that Fed members are divided when to start winding down the $4.7 trillion balance sheet.

US Dollar Remains Neutral despite Positive NFP Figures

On Friday the US economy posted a better than expected job report. The market posted 222k new jobs versus the general consensus of only 179k new jobs. But the downside was that the unemployment rate was weaker than the consensus coming 1 tick higher at 4.4%while the Average Hourly Earnings dropped to 2.5%. The overall soft NFP report kept the US dollar almost unchanged.

Gold Price Drops on Fears of Central Banks Stimulus Cuts

The Gold price continued to drop as several central banks are beginning to move away from loose monetary policy and cut back from their stimulus programs. Gold prices reached a 5-months low and found support at $1207 per ounce.

US Stock Index Recovers after being hit by Tech sell off But

The US stock index S&P 500 was hit by the sell-off in the technology sector, but it quickly found support at 2406 before bouncing and closing indecisively for the week. The risk on environment was very persistent as investors were selling bonds and at the same time buying more risky assets.
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