FX Daily Review: US Dollar Gets a Lift from Positive Economic Vibes

By Investor Empires On Jul 31, 2024

the U.S. dollar US stocks rose today, supported by positive economic data and optimism about the resilience of the US economy.

The June Job Openings and Labor Turnover Survey (JOLTS) showed job openings Decreased from 8.23 million to 8.18 millionexceeding analysts’ expectations.

The Federal Reserve closely monitors the JOLTS data as part of its assessment of the labor market and overall economic health.

Strong JOLTS numbers may influence the Fed to keep interest rates high to control inflation. A tight labor market (high job openings, low unemployment) can lead to wage growth, which contributes to inflationary pressures. A weak labor market may lead to lower interest rates to stimulate growth.

The CB Consumer Confidence Report for July showed that Increase from 97.8 to 100.3also exceeding expectations.

The report provides insights into consumers’ views on current economic conditions and their expectations for the near future. Sharp shifts in confidence can alert the Federal Reserve to potential economic risks, influencing its policy stance.

While the dollar rose, gains were limited as market participants exercised caution ahead of the Fed announcement.

the The Federal Reserve’s highly anticipated Federal Open Market Committee meeting is in the spotlight. tomorrowas market participants eagerly await the central bank’s decision on interest rates.

Will JB Bao come out as a hawk or a dove?

The key question for tomorrow’s FOMC meeting, and its impact on stocks, bonds, and the US dollar, is: The strength with which the Fed signals a September rate cut.

Current market expectations, as reflected in: Federal Reserve Funds FuturesExpectations are that a rate cut in September is almost certain.

The Fed will signal its decision through the “Forward Guidance” portion of the FOMC statement, which was released on 6:00 PM GMT / 2:00 PM EST.

the main sentence To watch is:

“The Committee does not expect it to be appropriate to reduce the target range until it has greater confidence that inflation is moving sustainably toward 2 percent.”

If the Fed plans to signal a rate cut in September, This statement will be modified. To reflect that more Confidence in achieving the 2% inflation target.

Aside from the statement, pay close attention to Fed Chair Powell’s remarks. Comments during the press conference.

For more details on what to watch out for, read on. Event Guide: FOMC Statement (July 2024) Which is available to premium members.

In this guide, we explore market expectations, possible scenarios, and potential reactions to the Fed’s decision, with a particular focus on its impact on the US Dollar.

Forex Market Drivers

Let’s review the price action in Forex today.

Which currency pairs made the biggest gains today?

New Zealand Dollar/Canadian Dollar He was the leader of the group, and got 0.47% or 38 points.

As explained by us Foreign exchange market drivers Page, the top 5 gainers had very small gains.

look at me NZD/CAD Trend Following RatingHe showed strength. bearish Evaluation for about a month.

But the Overbought/Oversold Rating for NZD/CAD He appears “neutral” evaluation.

Which currency pairs lost the most today?

GBP/JPY He was the biggest loser, as he fell. 0.84% or 166 points.

currency strength

What is the overall strength or weakness of the individual major currencies today?

Based on currency strength meter On MarketMilk™, JPY It was the strongest currency, while GBP It was the weakest currency.

If we dig a little deeper and look at how the major currency pairs work Moved in the last 24 hoursWe can see USD/JPY Rise during the Asian session then decline during the New York session.