The US dollar continued to plunge on Tuesday, heading down towards its yearly lows against both the pound and the euro. Its rapid fall from grace has been fuelled in large part by a key week for the Federal Reserve, which releases FOMC minutes tonight before its annual get together.
Yesterday, GBP/USD rose by a quarter of a cent, briefly touching its highest mark this year. EUR/USD also approached the same milestone after picking up nearly 0.5%. It was a more even contest for GBP/EUR, which swung between minor gains and losses to finish at around where it began the day.
As we await events later this week, the lack of any meaningful data has meant the US dollar has wilted in the face of significant (and often excessive) anticipation. FOMC minutes will be watched closely tonight, but the really big event is on Friday when Fed chair Jerome Powell gives a major press conference.
For data lovers, it was slim pickings again on Tuesday. The eurozone reported its final inflation read for July was unchanged from preliminary estimates of 2.6%. That marked a slight uptick from June’s 2.5%, yet most analysts believe the European Central Bank (ECB) is lining up another cut in September.
As expected, Sweden’s Riksbank cut interest rates to 3.5% yesterday and said it could cut as many as three more times before the end of the year.
The price of gold set a new all-time high yesterday on sky high demand from the Chinese market. Meanwhile, crude oil steadied as the outcome of negotiations in the Middle East remained unclear.
After a near implosion earlier this month, global stock markets are remarkably on course for the longest spell of gains since December. A global stock market tracker found its selection of major indexes had finished up for nine days in a row, although Chinese markets have turned rather sluggish lately.
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