Dollar gyrates on weak ADP, Fed comments

“The hard, cold reality of trading is each trade has an uncertain outcome.” – Mark Douglas

 

 

HEADLINES

 

 

• Fed Vice Chair Clarida anticipates rate hikes starting in 2023
• Dollar rebound holds as yields steady ahead of jobs data
• Oil Extends Slide as Stockpile Data Adds to Virus Concerns
• U.S. Stocks Fall on Clarida Comments, Jobs Miss
• Countdown to Ethereum’s ‘London’ Hard Fork: What You Need to Know
• EUR/CHF: SNB may have tolerance to see a slump to 1.03 – ING

 

 

FOREX

 

 

Fed Vice Chair Clarida anticipates rate hikes starting in 2023

 

Federal Reserve Vice Chairman Richard Clarida said Wednesday the central bank is likely to hit its economic targets by the end of next year and start raising interest rates again in 2023. While he said the jobs market still has to recover, Clarida noted that inflation is tracking to meet and exceed the Fed’s 2% goal. That sets the stage for the Fed to hit the “substantial further progress” benchmark it has set before it will start tightening policy.

 

Dollar rebound holds as yields steady ahead of jobs data

 

The dollar held gains on Wednesday after a quick recovery from an earlier fall as markets chose to focus on a suggestion from a top U.S. Federal Reserve official that the central bank may reduce support for the improving economy more quickly than widely thought. The bullish comments on the U.S. economy, by Fed Vice Chair Richard Clarida, triggered a rebound in U.S. Treasury yields and turned market attention away from the release two hours earlier of an unexpectedly weak private employment report that had driven the dollar down.

 

 

COMMODITIES

 

 

Oil Extends Slide as Stockpile Data Adds to Virus Concerns

 

Oil slumped in New York after a surprise increase in U.S. crude inventories added to renewed concerns about demand recovery as China battles the coronavirus resurgence. West Texas Intermediate futures dropped as much as 3.8%. The delta strain of Covid-19 has been detected in almost half of China’s 32 provinces in two weeks, and at least 46 cities have advised residents against non-essential travel. Meanwhile, American crude supplies increased by 3.63 million barrels, the biggest gain since March, government data showed.

 

 

STOCKS

 

 

U.S. Stocks Fall on Clarida Comments, Jobs Miss

 

U.S. equities slumped after the vice-chair of the Federal Reserve suggested rates could rise by 2023 and mixed economic data for July showed U.S. companies adding far fewer jobs than expected. The S&P 500 fell, deepening losses after General Motors Co. missed profit estimates, while the Nasdaq 100 was higher with technology stocks outperforming.

 

 

CRYPTO

 

 

Countdown to Ethereum’s ‘London’ Hard Fork

 

The Ethereum blockchain will undergo its 11th backward-incompatible upgrade, also called a “hard fork.” This hard fork, dubbed “London,” contains five Ethereum Improvement Proposals (EIPs), each featuring code changes aimed at optimizing and improving the world’s second-largest cryptocurrency by market capitalization.

 

 

ANALYSIS

 

 

EUR/CHF: SNB may have tolerance to see a slump to 1.03 – ING

 

“We had been bullish EUR/CHF this year on the more constructive global cycle, yet the more mixed global picture and increased ECB dovishness suggest that bullishness will have to be pushed back into 2022 and wait on the turn in the ECB cycle.”

“We’ll be watching to see if SNB intervention picks up here at 1.07 – but last year’s low near 1.05 looks more of a line in the sand – and it could even be nearer 1.03 if the SNB is using the real trade-weighted CHF as a guide.”

 

 

CHART

 

 

Euro / Swiss franc – Daily Candlesticks

Source: GKFX Prime Metatrader 4

EUR/CHF has dropped to a new low for 2021 after falling under key support at 1.075. The breakdown extends the downtrend that’s been in place since the break a long-term rising trendline that began in May 2020. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

SOURCE

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/eur-chf-snb-may-have-tolerance-to-see-a-slump-to-103-ing-202108041314
https://www.cnbc.com/2021/08/04/forex-markets-new-zealand-dollar-us-jobs-data.html
https://finance.yahoo.com/news/forex-dollar-rebound-holds-yields-193046046.html
https://www.cnbc.com/2021/08/04/fed-vice-chair-clarida-anticipates-rate-hikes-starting-in-2023.html
https://finance.yahoo.com/news/asia-stocks-eye-steady-open-221452303.html
https://www.coindesk.com/why-ethereums-london-upgrade-matters