EUR/USD breaks parity on Fed hike fears and Italian political crisis
The euro-dollar exchange rate (EUR/USD) broke below the parity threshold on Thursday, hitting an intraday low of 0.995, on growing fears of a one-point rate hike by the Federal Reserve in July and following the resignation of Mario Draghi. as Italian Prime Minister
After yesterday’s shocking US inflation data, with the CPI index rising 9.1% year-on-year in June, market speculators readjusted their inflation rate forecasts. Fed, market speculators readjusted their Fed rate forecasts, with the FedWatch CME Tool is now counting on a 50% probability of a 100 basis point hike in July. The last time the Fed raised rates by 100 basis points in a single meeting was in 1981, the last time US inflation exceeded 9%.
As far as Europe is concerned, the single currency continues to make negative political headlines. Although he won a vote of confidence in the Senate despite the boycott of the Five Star Movement, Draghi announced his resignation as Prime Minister of Italy due to the coalition’s narrow majority.
According to US macroeconomic figures today, the number of Americans filing new unemployment claims jumped by 9,000 to 244,000 in the week ending July 9, the most since November 2021, and slightly lower. above market forecasts of 235,000, but not enough to decisively reverse dollar strength.
Chart of the day: EUR/USD broke parity with Draghi’s resignation
Forex Market Today: USD Wins Against All Major Currencies
EUR/USD Live Chart – Euro vs US Dollar Exchange Rate Today (EUR to USD)
Japanese yen plummeting: USD/JPY hits August 1998 highs
Japanese Yen (JPY) Trading News: The depreciation of the Japanese yen continues unabated, fueled by expectations that the Fed will raise interest rates by one percentage point in July and by the dovish stance of the Bank of Japan. USD/JPY hit an intraday high of 139.4 before falling back to lows of 139 at the time of writing. It is at its highest since August 1998. As said before, the prognosis for the USD/JPY pair can only be altered by the development of indisputable indicators of a severe recession in the United States, which could herald a change in Federal Reserve policy. .
USD/JPY Live Chart – US Dollar vs Japanese Yen exchange rate today (USD to JPY)
Pound shows no sign of recovery: GBP/USD flirts with 1.18
British Pound (GBP) Trading News: The British pound also had a session in the red today as bets on a potential 100 basis point rate hike by the Federal Reserve pushed the Cable (GBP/USD) to an intraday low of 1.178 , before rebounding slightly to 1.18. As the fight for Downing Street intensifies, investors remain focused on the political environment. The first ballot for a new Conservative leader took place yesterday, and the second round is today, with Rishi Sunak in the lead. The 14-day RSI is approaching oversold territory again, but failed to provide a significant bullish reversal signal in all other events this year.
GBP/USD Live Chart – British Pound to US Dollar Exchange Rate Today (GBP to USD)
Canadian Dollar Falls Despite Monstrous Bank of Canada Rise: USD/CAD Reaches October 20 Highs
Canadian Dollar (CAD) Trading News: It’s a negative day for the Canadian dollar which falls more than 1% against the dollar, touching an intraday low at 1.32, before returning to 1.31, the lowest level since October 2020, while the oil explodes towards 90 dollars a barrel (-3% today) under the growing signs of a recession in the United States. The Loonie was the best performer among the G-10 currencies yesterday, after the Bank of Canada unexpectedly hiked rates by 100 basis points to 2.5% as the market expected a jump of 75 basis points. The USD/CAD pair continues to remain in the upper range of the bullish channel as of May 2021. The 14-day RSI indicator has been moving above 50 for over a month now.
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