US Dollar Mixed as Market Awaits Q1 GDP Data
The US dollar was mixed against its major trading partners early Wednesday as markets look ahead to the third estimate of Q1 gross domestic product, an appearance by Federal Reserve Chairman Jerome Powell and weekly oil stocks data.
Earlier Wednesday, the Mortgage Bankers’ Association said that weekly applications rose for a third straight week as mortgage rates pulled back, though the applications stand well below their level a year ago.
Powell’s testimony last week suggested that the Fed will continue to push rates higher to fight inflation, with a further 75 basis point increase at the July meeting being priced in by markets. READ: Dollar Trades Stronger as Market Awaits Inflation Data
A quick summary of foreign exchange activity heading into Wednesday shows USDEUR ticked up slightly to 1.0527 from 1.0521 at the Tuesday US close but was below the 1.0583 level at the same time Tuesday morning.
EU consumer confidence slipped further below the breakeven point in June according to data released earlier Wednesday, while Spanish consumer prices surged in June and Spanish retail sales were stronger than expected in May.
The data highlights of the week will be EU unemployment on Thursday and inflation on Friday. The European Central Bank’s monetary policy committee meets next on July 21 when it is expected to begin its tightening cycle.
GBPUSD fell to 1.2171 from 1.2184 at the Tuesday close and 1.2244 at the same point Tuesday morning. There are no UK data scheduled for release on Wednesday. UK GDP will be released Thursday.
The Bank of England is expected to maintain its tightening cycle to tamp down inflation after a 25 basis point increase at the last meeting. Bank of England Governor Andrew Bailey speaks Wednesday morning.
USDCAD fell slightly to 1.2851 from 1.2875 at the Tuesday US close but rose from 1.2833 at the same point Tuesday morning. There are no Canadian data scheduled for release Wednesday. Canada’s GDP will be released Thursday. Markets anticipate further monetary policy tightening at the Bank of Canada’s July 13 meeting after June’s 50 basis point increase.
USDJPY rose to 136.435 from 136.164 at the Tuesday US close and 136.2215 at the same point Tuesday morning. Japanese retail sales rose for the third straight month in May, but consumer confidence fell to its lowest level in over a year in June.
The Bank of Japan is expected to maintain its accommodative monetary policy. #US Dollar Mixed as Market Awaits Q1 GDP Data
