Forex News Roundup & other current affairs for 25th July 2023
Categories: Forex News | Published by: GoofySm
- GBP/USD is under pressure around the 1.2840 mark. The S&P Global Composite PMI showed that US business conditions improved after the FOMC meeting. The pair struggles to gain ground and remains on the decline, which may be impacting the GBP/USD exchange rate.
- China’s state banks are selling dollars both onshore and offshore to defend the yuan. The Chinese currency has weakened to a seven-month low against the US dollar. The People’s Bank of China (PBOC) has promised “comprehensive measures” to prevent wild swings in the exchange rate. They have tools to stabilize the yuan and have set stronger-than-expected midpoint fixing guidance rates.
- The eurozone business downturn has worsened, raising concerns of a potential recession. Moreover, the UK economy is also facing a sharp contraction in business activity. Their economy may escape recession, though the recovery is expected to be slow. The Bank of England may resort to additional measures to prevent a recession. The EU’s external trade is crucial for GDP growth, and the economic crisis has impacted pension systems in Member States.
- Gold prices rebounded from an over one-week low and climbed back above $1,960. For holders of other currencies, the weaker dollar made gold more affordable. And the metal was expected to post a third weekly gain due to expectations that the Fed would take a break. Gold prices are sensitive to interest rate hikes, inflation, and the value of the dollar.
- The Japanese yen has been sliding ahead of the Bank of Japan’s monetary policy decision. The yen’s value has dropped by over 20% against the dollar over the past year, putting pressure on Japan’s economy. The Bank of Japan is expected to maintain its ultra-low interest rates, which could boost Dollar/Yen trading. The dollar has been gaining strength against the yen, and the USD/JPY pair looks set to remain firm on the divergence of US/Japanese monetary policy and rising Japanese imports.
- Bitcoin dropped to $29k as the Wall Street Journal (WSJ) ratcheted up Binance issues.