China’s Export Growth Fuels Yuan, US Data in Focus
Main Market Movers Today
China’s Balance of Trade:
- China posted a surplus of $99.05 bln in June, well above the $82.62 billion previous reading and more than expectations of $85 billion. This rise was due to strong export growth and a stable environment in imports, helping to propel the Chinese yuan (CNY) higher (Investing.com).
Upcoming US Economic Data:
- US Producer Price Index: The June PPI consensus remains -0.2% m/m. This should further underscore the absence of wholesale-based inflation, one possible ingredient for future Federal Reserve rate decisions. (Kiplinger.com).
- US Michigan Consumer Sentiment Index: The preliminary reading for July is expected to come in at 68.2, a little lower than the consensus expectation of 68.5. It measures consumer confidence and impacts consumption and the general growth of an economy.
Currency Movements:
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- EUR/USD: Meanwhile, the euro was trading flat at 1.0866, at minor appreciation levels, as the market was awaiting updated miscellaneous economic data from the US and evaluating current economic trends within the Eurozone.
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- GBP/USD: The Pound Sterling is seen trading at 1.2910, partly on the positive side, as a direct result of improved economic indicators and recent changes within the political scenario in the United Kingdom.
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- USD/JPY: The Japanese yen is being quoted at about 159.10 per USD, showing some swings ahead of the US PPI data release (X-Rates).
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- NZD/USD: The New Zealand dollar changes hands at 0.6096. As usual, its price is determined by broad-market conditions and tentative position-setting ahead of US economic data. (X-Rates).
Commodities and Cross Rates:
- Gold: Prices are rising in the gold market, which is trading around $1,928 per ounce. This comes from the view in the market that softer US PPI is expected, increasing the attractiveness of gold as a safe-haven investment.
- Brent Crude Oil: Brent crude prices were steady around $85 a barrel as geopolitical tensions supported the market, while summer demand kept a floor under prices.
Other Economic News
Global Market Sentiment:
- Investors are digesting mixed economic data against the backdrop of rising geopolitical tensions. The possibility of interest rate cuts by the Federal Reserve is still the dominant factor driving overall market sentiment. Just released CPI data from China, showing subdued inflation, has added to these dynamics in global markets . (DailyFX) (Forex).
Central Bank Policies:
- The broad divergent monetary policy path for large central banks is one of the major drivers in the currency market these days. The very cautious Federal Reserve, likely easing at the European Central Bank, and a dovish Bank of Japan are some of the themes that characterize today’s market (DailyFX) (Forex).