The US Dollar managed to stabilize and partially recover from recent significant losses, while global stock markets experienced a rebound, driven by a reduction in market pessimism. The Reserve Bank of Australia (RBA) held the Official Cash Rate (OCR) steady, as anticipated, but issued a hawkish statement.
Here’s a summary of key financial developments for Wednesday, August 7:
USD Index (DXY) Sees Rebound
The USD Index experienced a notable rebound, recovering from Monday’s sharp drop to the 102.00 level. This recovery was bolstered by improved market sentiment and a rise in US yields. On August 7, market participants will be watching the MBA’s weekly Mortgage Applications data and the Energy Information Administration’s (EIA) report on US crude oil inventories.
EUR/USD Experiences Decline
The EUR/USD pair faced pressure, halting a two-session winning streak that had seen the currency pair breach the 1.1000 mark. Germany’s Balance of Trade results are set to be released later today.
GBP/USD Hits Five-Week Low
The GBP/USD pair extended its losses from Monday, falling to a five-week low near 1.2670. There are no significant economic updates scheduled for the UK on August 7.
USD/JPY Advances
The USD/JPY pair climbed above the 146.00 threshold, reversing a multi-day decline amid renewed selling pressure on the yen. The preliminary Coincident Index and Leading Economic Index will be released later today.
AUD/USD Rebounds
After hitting a year-to-date low near 0.6350 on Monday, the AUD/USD pair regained upward momentum, surpassing the 0.6500 level, supported by the RBA’s hawkish stance. The Ai Group Industry Index is scheduled for release in Australia.
WTI Prices Remain Depressed
Concerns over Chinese demand continued to affect market sentiment, keeping West Texas Intermediate (WTI) crude oil prices subdued around $73.00 amid an extended bearish trend.
Gold and Silver Prices Retreat
Gold prices fell further, testing the $2,380 per ounce mark due to the strong rebound in the dollar and rising US yields. Silver prices also continued their decline from Monday, approaching recent lows near $26.50 per ounce.
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