Forex Today: Dollar’s pause about to end

What you need to take care of on Wednesday, July 13:

Risk aversion amid slowing economic growth and soaring inflation remained the main theme across financial markets. The American currency appreciated throughout the first half of the day, reaching fresh 20-year highs against the EUR, as the pair touched 0.9999.

The greenback lost steam ahead of Wall Street’s opening, giving up some of its latest gains to end the day marginally lower against most major rivals. The better market mood came from a White House memo, which noted that US macroeconomic data, including the June jobs report, are not consistent with a recession. The document added that “labor market strength puts the US in a better position than many other countries to transition to lower inflation and steady growth.”

US indexes bounced with the news but turned red ahead of the close, and as investors await US inflation figures scheduled for Wednesday.

GBP/USD bottomed at 1.1806, later settling just below the 1.1900 threshold. The UK Conservative 1922 Committee announced eight candidates for the Tory leadership contest. Meanwhile, Bank of England Governor Andrew Bailey said there are alternatives to 25 bps rate hikes in the table, adding he expects inflation to fall sharply next year.

 Commodity-linked currencies managed to recover ground but trimmed part of their gains ahead of the close, following Wall Street’s slump. The AUD/USD pair trades around 0.6750, while USD/CAD hovers in the 1.3020 price zone.

Safe-haven currencies appreciated against the greenback, with USD/CHF trading at 0.9810 and USD/JPY at 136.80.

Gold is near a fresh 2022 low of $1,723.15 a troy ounce and seems poised to extend its slump. Crude oil prices edged firmly lower, with WTI now trading at $95.50 a barrel.

The focus is now on inflation as Germany, and the US will release updates on their respective Consumer Price Indexes. German annual inflation is expected to be confirmed at 7.6% in June, while US one is foreseen to jump to 8.8%, a new multi-decade record.

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