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Jun 24 - 04:55 PM

EUR/USD - COMMENT-US Recap: EUR/USD Bounces As Dollar Takes A Breather

By Burton Frierson  —  Jun 24 - 02:55 PM

The dollar eased against the other majors on Monday, taking a breather from its recent rally as the market pondered Japan intervention risks while UK data helped sterling at the margins.

However the direction of travel has been mostly in the dollar's favor recently, and it remains to be seen if that is changing, especially with French and UK elections on the horizon.

The dollar also faces some risks this week, with PCE -- a favorite inflation indicator of the Fed -- due on Friday and expected to show a renewed retreat in the rate of price growth.

San Francisco Federal Reserve Bank President Mary Daly said she does not believe the U.S. central bank should cut rates before policymakers are confident that inflation is headed toward 2%.

Daly also said that the U.S. central bank must "exhibit care" as it aims to finish the job of bringing inflation under control, noting that rising unemployment is increasingly a risk.

EUR/USD made a fleeting foray above the 10-DMA but retreated back down below it by New York afternoon trade without making a run at the 55-DMA and other moving averages beyond there.
It was, however, still solidly positive on the day.

USD/JPY recouped much of the day's earlier losses that had pushed it down to as far as 158.75.
It was last sitting at 159.65.

GBP/USD struck a high of 1.2698 before backing off without probing the 10-DMA above there.

U.S.
Treasury yields were little changed on the day, holding within recent ranges.

The S&P 500 was down 0.08% after surrendering earlier gains.

WTI rallied 1.16% on the prospect of strong summer driving demand and as tensions in the Middle East and drone attacks on Russian refineries led to concerns about supply.

Copper eased 0.2%, pressured by subdued demand in top consumer China and a significant upturn in deliveries to warehouses approved by the London Metal Exchange, while some support was provided by the softer dollar.

Gold firmed 0.57%, also helped by the retreating U.S. currency.

Heading toward the close: EUR/USD +0.37%, USD/JPY -0.14%, GBP/USD +0.32%, AUD/USD +0.22%.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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