Forex Today: Sentiment sours amid recession fears and ahead of the ECB

What you need to take care of on Thursday, July 21:

It was a busy and worrisome Wednesday, but the FX board did not reflect it as the lingering European Central Bank monetary policy announcement turned investors cautious.

Inflation is among the key global issues, as the Consumer Price Index in the UK surged by 9.4% YoY in June, while the Canadian CPI climbed by 8.1% in the same period, both up from May figures.

In the UK, the Conservative leadership contest has reduced candidates to two final ones, Rishi Sunak and Liz Truss. One of them will become the next Prime Minister replacing Boris Johnson. The winner will be announced on Monday, September 5, following a postal ballot completed by 160,000 Tory party members.

Wall Street opened with modest gains, but US indexes took a turn to the worst amid news big companies are cutting off jobs. Google was the first one, announcing it would pause recruitment for two week, while later in the day, Ford unveiled plans to cut as many as 8000 jobs in the coming weeks. The headlines put back on the table recession concerns.

In Italy, Prime Minister Mario Draghi won a confidence motion, but as three major cotillion parties boycotted the vote, he is likely to resign and call for early elections. Also, EU authorities fear a full cut-off of Russian gas, which will take a harsh toll on the Union’s Gross Domestic Product.

Meanwhile, Russia has announced geographical objectives of the special operation in Ukraine have changed to add new territories.

The EUR/USD pair trades around 1.0170, while GBP/USD was once again unable to retain gains above the 1.2000 threshold and hovers in the 1.1960 price zone. The AUD/USD pair is marginally lower, holding below 0.6900, while USD/CAD consolidates around 1.2870.

The American dollar posted modest gains against CHF and JPY. Gold, on the other hand, fell to a fresh weekly low below $1,700 and now trades in the $1,697 price zone.

Crude oil prices edged marginally lower, with WTI now changing hands at $99.80 a barrel.

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