Key Updates for July 30th
As we head into Wednesday, financial markets are expected to be generally subdued as investors gear up for significant upcoming events. The European session will pay close attention to the preliminary second quarter GDP data from the eurozone. In the US, important economic indicators will include changes in ADP employment for July and the second quarter GDP figures. Most notably, monetary policy decisions from both the Bank of Canada (BOC) and the Federal Reserve are on the agenda.
After a strong rally on Monday, the US Dollar (USD) index has continued its upward trend, peaking above 99.00—its highest since late June—until Tuesday. However, it was revised downward early Wednesday and now hovers around 98.80. Meanwhile, US stock index futures are mixed, indicating a cautious market. It’s widely anticipated that the Fed will maintain its current policy after the July gathering. Any language changes in the statement, especially comments from Chairman Jerome Powell, may influence market expectations for potential interest rate cuts in September. This could also impact USD evaluations.
Following two days of discussions between US and Chinese officials in Stockholm, no significant progress was reported. Yet, both sides described the meeting as constructive. They have reportedly agreed to seek an extension of the 90-day tariff ceasefire. US Treasury Secretary Scott Bescent mentioned that the decision on extending the truce ultimately rests with President Donald Trump.
This Week’s US Dollar Performance
The following table illustrates the changes in the US dollar (USD) against various currencies this week, with the dollar showing strength against the euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.76% | 0.50% | 0.19% | 0.43% | 1.10% | 0.97% | 0.99% | |
| EUR | -1.76% | -1.27% | -1.51% | -1.31% | -0.64% | -0.78% | -0.75% | |
| GBP | -0.50% | 1.27% | -0.44% | -0.04% | 0.63% | 0.49% | 0.50% | |
| JPY | -0.19% | 1.51% | 0.44% | 0.24% | 0.86% | 0.75% | 0.95% | |
| CAD | -0.43% | 1.31% | 0.04% | -0.24% | 0.64% | 0.54% | 0.55% | |
| AUD | -1.10% | 0.64% | -0.63% | -0.86% | -0.64% | -0.14% | -0.12% | |
| NZD | -0.97% | 0.78% | -0.49% | -0.75% | -0.54% | 0.14% | 0.00% | |
| CHF | -0.99% | 0.75% | -0.50% | -0.95% | -0.55% | 0.12% | -0.01% |
The heatmap demonstrates the rate of change among major currencies. The base currency is shown in the left column, while the estimated currency is across the top row. For instance, selecting US dollars and moving to the Japanese Yen presents the rate of change for USD against JPY.
In the Asian session, Australian data indicated that the Consumer Price Index (CPI) rose by 0.7% quarterly in the second quarter, falling short of the market expectation of 0.8%. This follows a previously recorded increase of 0.9% in the first quarter. The AUD/USD, after four days of losses, hovers near 0.6500, facing moderate bearish pressure.
The USD/CAD reached a five-week high near 1.3790 on Tuesday before entering a phase of consolidation. The BOC is expected to adjust its policy rate to 2.75% soon.
Regarding the EUR/USD, it remained stable around 1.1550 during Wednesday’s early European hours after experiencing a sharp decline earlier in the week. Data from Germany revealed that GDP grew at an annual rate of 0.4% in the second quarter, outperforming the market forecast of 0.2%.
The GBP/USD is trading within a narrow range above 1.3350 after a minor loss on Tuesday.
After a tough Tuesday, the USD/JPY is under bearish pressure, trading in negative territory around 148.00.
Gold experienced a rebound after a four-day decline, gaining around 0.4% on Tuesday and stabilizing near $3,330 during the early European hours.
