Caution over a further decline in the U.S. dollar
04.08.2021
- UK Services PMI (Final Reading)
- European Retail Sales
Yesterday’s stock market saw major U.S. indices rise, resulting in a trading session characterized by higher stock prices, lower crude oil prices, and flat interest rates. U.S. manufacturing orders for June, released yesterday, showed a 0.9% increase in durable goods and a 0.7% increase in non-defense capital goods excluding aircraft, marking the second consecutive month of growth and indicating strong demand.WTI crude oil fell sharply, briefly dipping below the key $70 level to $69.2, but is currently trading around $70.3.
With the yield on the 10-year U.S. Treasury note falling below 1.2% and trading sideways in the 1.17% range, the U.S. dollar continues to face resistance on the upside. The GBP/USD pair has risen slightly and is currently trading around 1.392. The AUD/USD pair has also formed an upward-sloping flag on the 4-hour chart and is currently trading around 0.739.
Today’s economic indicators include the UK Services PMI (final reading) at 5:30 PM, Eurozone retail sales at 6:00 PM, the US MBA Mortgage Applications Index at 8:00 PM, the US ADP National Employment Report at 9:15 PM, and Canadian housing starts at 9:30 PM,22:00: Remarks by James Bullard, President of the St. Louis Fed; 22:45: U.S. Services PMI (final reading); 23:00: U.S. ISM Non-Manufacturing PMI and remarks by Federal Reserve Vice Chair Clarida; and 23:30: U.S. weekly crude oil inventories.We will be watching closely to see if any trends emerge in currency strength and weakness as we move into the middle of the week.
Author: Keisuke Sakurai
