Here is what you need to know on Wednesday, July 13:
Following a downward correction in the first half of the day on Tuesday, the dollar regathered its strength amid souring market mood during the American trading hours with the US Dollar Index (DXY) closing the day flat. The DXY stays relatively quiet above 108.00 early Wednesday as focus shifts to Consumer Price Index (CPI) data. The Bank of Canada (BOC) will announce its interest rate decision and release the policy statement later in the day. Finally, the Federal Reserve's Beige Book will be looked upon for fresh impetus as well.
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Wall Street's main indexes moved into positive territory after a memo released by the White House showed that the US economy was expected to transition into lower inflation and steady growth on the back of the strong labor market. The positive impact of these remarks on market mood, however, remained short-live and the S&P 500 Index fell nearly 1% on Tuesday. Early Wednesday, US stock index futures trade flat.
Meanwhile, the Reserve Bank of New Zealand (RBNZ) hiked its policy rate by 50 basis points (bps) 2.5% as expected. In the policy statement, the bank noted that the weaker NZD was having an impact on import prices. NZD/USD showed little to no reaction to the policy announcement and it was last seen posting small losses on the day near 0.6130.
USD/CAD closed the previous two days in negative territory and seems to have gone into consolidation phase above 1.3000 on Wednesday. The Bank of Canada is forecast to raise its policy rate by 75 basis points to 2.25% from 1.5%.
BOC Preview: USD/CAD set to surge on a dovish message after a 75 bps hike.
EUR/USD failed to gather recovery momentum and closed the day virtually unchanged near 1.0050 on Tuesday. The pair stays relatively calm near that level in the European morning. Eurostat will release May Industrial Production data later in the session. In the meantime, the data from Germany showed that annual CPI stood at 7.6% in June, matching the previous estimate.
GBP/USD gained traction in the early European morning and climbed above 1.1900. The UK's Office for National Statistics reported that Gross Domestic Product grew by 0.5% on a monthly basis in May, surpassing the market expectation of 0%. Other data showed that Industrial Production and Manufacturing Production expanded by 1.4% and 0.9% on a monthly basis.
USD/JPY closed in negative territory on Tuesday but started to edge higher early Wednesday. The pair trades above 137.00 in the European morning.
Gold touched its weakest level since September near $1,720 earlier in the day before recovering modestly. Following Tuesday's decline, the benchmark 10-year US Treasury bond yield moves sideways below 3%, limiting XAU/USD's action for the time being.
Bitcoin fell for the third straight day on Tuesday and closed below $20,000. BTC/USD moves sideways near $19,500 so far on Wednesday. Ethereum lost more than 5% on Tuesday and trades within a touching distance of the critical $1,000 handle.
https://www.fxstreet.com/news/forex-today-dollar-stabilizes-ahead-of-key-inflation-data-202207130659
2022-07-13 06:59:22Z
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