Daily Update – 24th July 2019
The EUR/USD pair is finishing Tuesday at its lowest in almost two months, paring intraday losses at around 1.1147. The American dollar appreciated steadily throughout the day, without a specific reason, but market players are pricing in the different approaches from policymakers to their respective monetary policies. US data disappointed, as the Housing Price Index increased by just 0.1% in May, well below the 0.3% anticipated, while Existing Home Sales decreased by 1.7% in June, missing the market’s forecast of -0.2%. Adding pressure on the Pound, Anne Milton has resigned as skills ministers, attributing her decision to concerns about the prospect of a no-deal exit. As widely anticipated, Boris Johnson won the Conservative Party’s leadership, roughly getting double the votes of Jeremy Hunt. UK Finance Minister, Philip Hammond, has said he would resign if Johnson becomes the PM, but so far there is no news in that front. Anyway, given that Mr. Johnson said he would exit the EU with or without a deal by October 31, more resignation are expected alongside Sterling slides. The UK macroeconomic calendar only includes June BBA Mortgage Approvals this Wednesday. This Wednesday, Markit will publish the preliminary estimates of July PMI for the EU and the US. According to analysts’ forecasts, activity in the manufacturing sector in Germany and the EU is expected to have recovered just modestly but also to remain in contraction territory. The Services sector is seen in better shape. In the US, expectations are for both sectors, having expanded at a moderate pace. The US will also release June New Home Sales. Better-than-expected EU data can bring some relief to EUR buyers, although with the ECB unveiling its latest decision on monetary policy this Thursday, robust gains are unlikely.Yesterday Focus
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