A Global Economic Slowdown Is Causing Risk-Off Sentiment, The US Dollar Remains Strong and AUD Expected To Be Currency Most Affected (EUR/USD, EUR/GBP, GBP/AUD, AUD/JPY)

ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

Summary:

  • During the trading week last week the EUR/USD currency pairs price fell back to near five-year lows.
  • It is expected that the global economic slowdown will affect the Australian Dollar more than the Pound Sterling.
  • Investors looking out for ECB announcements and EU retail data this week.
  • AUD/JPY bearish.

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Euro’s left at the mercy of market sentiment

The market is reflecting mixed signals for this currency pair. During the trading week last week the EUR/USD currency pairs price fell back to near five-year lows and may be at risk of remaining under pressure to those levels in the coming days unless the U.S currency falters further in the wake of its stumble on Friday. The Euro is under pressure from the strong US Dollar and neither currencies benefitted last week despite central banks claiming their determination to fight inflation. There was not much activity over the weekend regarding events that could move the market, thus, the global market including the Euro has been left at the mercy of market sentiment.

A Global Economic Slowdown Is Causing Risk-Off Sentiment, The US Dollar Remains Strong and AUD Expected To Be Currency Most Affected (EUR/USD, EUR/GBP, GBP/AUD, AUD/JPY) - 1 EUR/USD Price Chart

EUR/GBP currency pair

The market is reflecting mixed sentiment for this currency pair. Investors will be watching the European Central Bank’s (ECB) policy announcements this week as well as the EU retail sales data that is due to be released. The Euro got no support when ECB president Christine Lagarde spoke last week and emphasised the importance of optionality in relation to the size and timing of interest rate changes after the 0.25% uplift in July that was pre-announced last month.

A Global Economic Slowdown Is Causing Risk-Off Sentiment, The US Dollar Remains Strong and AUD Expected To Be Currency Most Affected (EUR/USD, EUR/GBP, GBP/AUD, AUD/JPY) - 2 EUR/GBP Price Chart

AUD expected to be more affected by the economic slowdown than the GBP

The Australian Dollar is one of the biggest losers amongst the major currency pairs over the past month and analysts predict this week's Reserve Bank of Australia (RBA) policy update mixed with souring global investor sentiment should keep the currency under pressure from the pound sterling. In addition, it is expected that the global economic slowdown will affect the Australian Dollar more than the Pound Sterling.

A Global Economic Slowdown Is Causing Risk-Off Sentiment, The US Dollar Remains Strong and AUD Expected To Be Currency Most Affected (EUR/USD, EUR/GBP, GBP/AUD, AUD/JPY) - 3 GBP/AUD Price Chart

AUD/JPY currency pair

The market is reflecting bearish signals for this currency pair. It is expected by the market that the global economic slowdown will affect the Australian Dollar. The Bank of Japan (BoJ) is currently defiantly maintaining yield curve control despite speculators attacks that are betting that the BoJ will be unable to hold yields down if prices continue to rise.

A Global Economic Slowdown Is Causing Risk-Off Sentiment, The US Dollar Remains Strong and AUD Expected To Be Currency Most Affected (EUR/USD, EUR/GBP, GBP/AUD, AUD/JPY) - 4 AUD/JPY Price Chart

Sources: finance.yahoo.com, poundsterlinglive.com, dailyfx.com

ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

Rebecca Duthie

Remote Editor and writer Intern
FXMAG.COM

Rebecca has a bachelors degree in Investment Management, a Post Graduate Diploma in Financial Planning and is currently enrolled in a Masters program in International Management with a Specialization in International Finance.