Live Chat

US dollar slides after soft economic data, yen pinned near 38-year lows

Euro, sterling hold onto gains against US dollar

On Thursday, the pound and the euro maintained their gains against the US dollar from the previous day, buoyed by soft economic data that had weakened the greenback, as voting began in Britain and the second round of the French election drew closer.

Sterling was last at $1.2757, up 0.1%, after gaining 0.46% on Wednesday and reaching a three-week high. The euro was at $1.080, up 0.1% after a gain of 0.4%, also at a three-week top.

The pound is now up for the year against the US dollar, making it the best-performing G10 currency in 2024.

Choose your points of movement

Сalculate your hypothetical P/L (aggregated cost and charges) if you had opened a trade today.

Market

ETFs Search
ETFs
Crypto
Shares
Currency
Bonds
Commodity
Index

Instrument

Search
Clear input
Porsche
Procter & Gamble
Roku Inc
Deere
Quanta Services
UniCredit
Rolls-Royce
Inditex
Deliveroo Holdings
Goldman Sachs
Coca-Cola Co (NYSE)
Infosys
Toro
ChargePoint Holdings Inc
Comcast
Chipotle
Campari
The Cheesecake Factory
Virgin Galactic
LVMH
Eni
Medtronic
ProSiebenSat.1
Qualcomm
BioNTech
SIG
Meta (Formerly Facebook)
Philip Morris
Visa
Schlumberger
SMCI
Plug Power
Nike
ADT
3D Systems
Nikola Corporation
Pinterest Inc
Bristol Myers
Jumia Technologies
Broadcom
Upstart Holdings Inc
Salesforce.com
Amazon.com
Cinemark
Moderna Inc
AMC Entertainment Holdings
Air France-KLM
Glencore plc
Starbucks
Uber
Golar LNG
Pfizer
Palantir Technologies Inc
CrowdStrike Holdings
Mastercard
Blackrock
Vir Biotechnology
Toyota
Kuaishou
MerckCo USA
Cisco Systems
Porsche AG
II-VI
JD.com
Snap
JP Morgan
Lululemon
UPS
AIA
Deutsche Bank
Airbus Group SE
Zoom Video Communications
XPeng Inc
Trade Desk
AbbVie
Sartorius AG
Mondelez
Hammerson
CNOOC
Snowflake
Thermo Fisher
CCB (Asia)
Kraft Heinz
Unilever
China Life
eBay
Linde PLC
GameStop
Infinera
UnitedHealth
ASOS
SAP
Barclays
Christian Dior
Wish.com Inc
AstraZeneca
FirstRand
SONY
CAT
Applied Materials
BlackBerry
ALIBABA HK
British American Tobacco
AT&T
Siemens
Diageo
Palo Alto Networks
Vipshop
Amgen
Prosus N.V.
ASML
Airbnb Inc
Lithium Americas Corp
JnJ
Wal-Mart Stores
Nasdaq
Exxon Mobil
McDonald's
Shopify
Hermes
Iberdrola
Peloton Interactive Inc.
Apple
Volkswagen
Marriott
Sea
Micron
Conoco Phillips
Morgan Stanley
Ford
Upwork Inc.
Nel ASA
Bank of America
Accenture
Santander
Abbott
Trump Media & Technology Group
Royal Bank Canada
UiPath Inc
Spotify
Fedex
LUCID
Anglo American
Allianz
Dave & Buster's
Shell plc (LSE)
Xiaomi
Adidas
Skillz Inc
HDFC Bank
Cellnex
Freeport McMoRan
Wells Fargo
PepsiCo
Berkshire Hathaway
Lockheed Martin
Coinbase Inc
HSBC
Target
Netflix
Vonovia
PayPal
DISNEY
Invesco Mortgage
Blackstone
Boeing Co
Lumentum Holdings
Canopy Growth
Beyond Meat
Block
Qorvo
Delivery Hero SE
Teladoc
Unity Software
PG&E
Microsoft
Gilead
Li Auto
Chevron
Naspers
BP
MercadoLibre.com
Alibaba
New Oriental
CarMax
Lemonade
Citigroup
Two Harbors Investment aration
Taiwan Semi
Total
Bayer
Marston's
Twilio
Home Depot
Oracle
Gen Digital Inc
Baidu
ZIM Integrated Shipping Services Ltd
T-Mobile
Norwegian Cruise Line
ON Semiconductor
American Express
Macy's
Vodafone
L'Oreal
Tesla
Robinhood
Nio
Lloyds
Aptiv PLC
Novavax
Norwegian Air Shuttle
American Airlines
TUI
Annaly Capital
RTX Corp
NVIDIA
Adobe
General Motors
PETROCHINA
Aurora Cannabis Inc
Barrick Gold
Fuelcell
General Electric
Anheuser-Busch Inbev
Continental
Eli Lilly
F5 Networks
Etsy
Hubspot
easyJet
Telecom Italia
Ceconomy
Rio Tinto
AMD
Cameco
Arista
Tencent
British American Tobacco
DeltaAir
Verizon
Airbus
Lufthansa
Teleperformance
GSX Techedu
Rivian Automotive
Wayfair
IBM
Bilibili Inc
HSBC HK
Occidental
Lyft
IAG
Costco
Tilray
Fresnillo
Intel
ROBLOX Corp
BASF
Workday Inc
GoPro
DoorDash
Electrolux
GoHealth
Alphabet (Google)

Account Type

Direction

Quantity

Amount must be equal or higher than

Amount should be less than

Amount should be a multiple of the minimum lots increment

USD Down
$-

Value

$-

Commission

$-

Spread

-

Leverage

-

Conversion Fee

$-

Required Margin

$-

Overnight Swaps

$-
Start Trading

Past performance is not a reliable indicator of future results.

All positions on instruments denominated in a currency that is different from your account currency, will be subject to a conversion fee at the position exit as well.

US dollar pressured by soft economic data

The dollar was pressured by softer-than-expected U.S. economic data on Wednesday, including a weak services report and an ADP employment report, indicating a slowing economy following an increase in initial unemployment benefit applications last week.

Jane Foley, head of FX strategy at Rabobank, was cited by Reuters as saying:

“The data is feeding expectations that maybe the labour market is weakening and the Fed will be able to cut rates later in the year”.

According to the news agency, markets are now anticipating nearly 50 basis points of Federal Reserve interest rate cuts in 2024, likely starting with a 25-basis-point move in September and another by year-end — bets which also brought down US Treasury yields.

The most important monthly US labor market data, non-farm payrolls, due on Friday, is expected to show an increase of 190,000 jobs in June after a rise of 272,000 in May, according to a Reuters poll of economists.

US markets are closed on Thursday for the July 4 holiday.

Big Labour win expected in UK election on Thursday

British voters are heading to the polls on Thursday, with Labour Party leader Keir Starmer expected to become the next prime minister, sweeping Rishi Sunak's Conservative Party out of office after a 14-year stint.

Foley noted two main reasons for the limited market reaction to the elections and campaign drama. She told Reuters:

"Firstly, Labour has been consistently ahead in opinion polls for some time, so there has been no shock. The second reason is Keir Starmer and Rachel Reeves have done quite a good job at convincing investors and the electorate that they have moved the party into the center ground."

Reeves is the Labour Party's finance policy chief.

Markets.com Chief Market Analyst Neil Wilson pointed to the lack of volatility by saying that had markets pricing in a Labour win but added that the potential economic effects of a Starmer-led government may not yet be clear:

“For what it’s worth, I don’t think we see massive moves on the [UK election] results. A thumping Labour win seems fully priced in — but we are not sure if the market is ready for what that will mean”.

Wilson expanded on the Labour economic policy in an earlier note ahead of the election on Wednesday:

“’Securonomics’ is untested and may be more radical than people realise. But the market might not react in the same way. The problem with Truss was policy uncertainty ratcheted up to the max — a Labour government is expected to deliver more clarity. We shall see if that is how it works. UK interest rates are set to come down soon, which will provide cover. If the market sniffs a genuine growth agenda alongside rate cuts, we could see the FTSE 250 outperform”.

Markets await France, UK elections

Market uncertainty eases ahead of French election

Analysts also pointed to uncertainty about the French elections, with a runoff set for Sunday.

Market nerves have eased somewhat, and the closely watched gap between German and French 10-year yields has narrowed to less than 70 basis points, having been above 80 bps before the first round of voting last week.

Francesco Pesole, FX strategist at Dutch bank ING, attributed this to numerous center and left-wing candidates dropping out of three-way runoffs to curb prospects for Marine Le Pen's right-wing National Rally party. He wrote in a note on Thursday:

"This raises the chances of a hung parliament, which appears a more desirable outcome for markets as it limits the chances of aggressive spending maneuvers. Our rates team continues to call for structurally wider French spreads, and we expect that to weigh on the euro throughout the summer”.

Japanese yen ticks up on weak US dollar but remains close to 38-year lows

The struggling Japanese yen, which failed to gain much traction on Wednesday, edged up on Thursday, with the US dollar down 0.36% at 161.11 yen.

It remained close to a trough of 161.96 per dollar hit in the previous session, its lowest since December 1986, with fundamentals stacked against the currency.

Traders were preparing for possible Japanese government currency intervention, with US markets closed for the July Fourth holiday. Tokyo's previous two rounds of yen buying occurred during illiquid trading periods or holiday-thinned markets.

However, the hurdle for yen intervention may be higher at this stage, according to a comment from Marito Ueda, general manager of the market research department at SBI Liquidity Market, cited by Reuters:

"The Ministry of Finance is saying the trigger for intervention is not the level, but if there are excessive moves. It's hard to step in since current moves don't fall into that category”.

The US dollar index (DXY), a gauge of the greenback’s strength against multiple major currencies, was down 0.2% at 105.2. Despite the slide, the DXY index remains up 3.81% year-to-date.


When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.

Latest news

New Zealand dollar drops on unexpected dovish tone from RBNZ

Wednesday, 10 July 2024

Indices

Unexpected dovish tone from RBNZ drops New Zealand dollar

Sterling steady as investors take in UK, French election results

Tuesday, 9 July 2024

Indices

Sterling steady near one-month high in wake of UK election

BP shares fall on Q2 profit warning

Tuesday, 9 July 2024

Indices

BP shares drop over 4% on Q2 lower profit warning

BP shares dip ahead of Powell Congress testimony

Tuesday, 9 July 2024

Indices

BP dips, Powell Congress speech ahead, records for Tokyo, NY

Live Chat