EUR/USD

The EUR/USD pair made an insignificant attempt at strengthening at the Asian session and is now trading at 1.1680. Published on Monday, June data on existing home sales were weak, but were almost ignored by the market. Instead of the expected growth, the indicator fell from 5.41M to 5.38M homes. USD is supported by the comments of representatives of the Chinese Foreign Ministry that the PRC is not going to use the devaluation of the yuan to gain competitive advantages in trade. The current decline in the Chinese currency was called a natural process. On Monday, EUR was additionally pressured by the level of consumer confidence in the euro area, which fell by 0.6 points in July.

During the day, investors are waiting for the publication of the July data on Consumer Confidence indices from the EU and the US. These indicators are calculated on the basis of a survey of managers of leading industrial and service companies. The survey concerns the current economic situation and prospects for business development. It is expected that the Manufacturing PMI of the EU may fall from 54.9 to 54.7 points, and the same index in the services sector can fall from 55.2 to 55.0 points. The US indicators will probably remain unchanged. The Manufacturing PMI will remain at the level of 55.4 points and Services PMI will remain at 56.5 points.

GBP/USD

The pair GBP/USD has also slightly declined in the morning and is now trading at 1.3090. USD is supported by the Chinese authorities' reluctance to use the weak yuan to gain competitive advantages in trade. Investors are waiting for Thursday, when the next round of EU-UK talks on Brexit will take place. The British government is trying to enlist the full support of its new plan, described in the White Paper. Foreign Secretary Jeremy Hunt visited Germany on Monday, and the Prime Minister Theresa May travels around the country to convince the public of the need for closer economic ties with the EU and to substantiate her plan for a soft Brexit.

AUD/USD

The AUD/USD pair declined at the Asian session and is now trading at 0.7370. Since significant economic releases in Australia are not expected on Tuesday, the movement of the instrument is under the influence of US news. The price is under pressure of reports that the Chinese authorities will not use the weakening of the yuan to gain competitive advantages, which means that so far the trade war will not turn into a currency one.

USD/JPY

Quotations of the pair USD/JPY during the Asian session fell to the level of 111.05, but then recovered some of the losses and are now at 111.30. JPY is under pressure from weak data on Manufacturing PMI. In July, the indicator decreased from 53.0 to 51.6 points instead of the expected growth. Investors are waiting for details of changes in monetary policy by the Bank of Japan. There was information recently that the regulator could begin unlimited redemption of bonds.

Gold

Quotes of gold in the morning dropped to 1218.00 amid the Chinese authorities' refusal to take advantage of the devaluation of the yuan.

Morning Market Review

The material published on this page is produced by the Claws&Horns Company and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

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