The Morning Update

The USD and treasury yield opens the week softer, while equities and oil prices are hedging higher. The USD is slightly weaker but remained close to an almost eight-week high. On the US economic data front, the market’s main focus is on Thursday’s US GDP and Friday’s Personal expenditure, Chicago’s purchasing index and the Michigan consumer sentiment.

In other news. Netanyahu has saidthe "intense phase" of fighting in Rafah in southern Gaza is nearly over but insisted that the war would continue until Hamas was completely driven from power. Israel offensive in Lebanon could increase risk of broader war.

In currency news. The JPY languished near the 160 level, drawing verbal warnings from Japanese authorities as intervention fears grip markets. The CNY has dropped to seven-month lows this week, alongside a reversal in equity investment flows into China. Autocracy is 'evil', Taiwan president says after China threatens death the death penalty inextreme cases for Taiwan’s diehard separatist. The USD opens weaker against the CNY 0.4%, JPY 0.44%, THB 0.11%, AUD and NZD 0.17%, while gaining strength against the trading currencies with the ZAR off 1% and MXN down 0.06%.

In commodity markets. Oil prices firmed slightly on Monday as traders weighed support from expected summer demand and geopolitical tensions against a stronger dollar. Gold prices hedged up on Monday as U.S. Treasury yields eased, while investors awaited inflation reading due later this week that could influence the Federal Reserve's interest rate trajectory. Silver followed suit rising 0.5% in early trading. In other metals, Copper is off 1,52%. Wheat hits its lowest level since June as the USD remains strong and supply outlook improves. Soybean trades 0.65% higher.

Current level USD Index               105.631           Down 0.16%

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The USD/CAD pair extends its losing streak for the seventh trading session. The market will keep a keen eye of any comments from BoC Macklem to speech later today.

Current level USD/CAD               1.3676            Down 0.13%

The EUR/CAD bounced back from Friday’s low but still trades below the 1.4700 area. Expect the EUR to remain under pressure as France enters the last week of their Presidential election.

Current level EUR/CAD                1.4664           Up 0.11%

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EUR/USD trimmed part of their losses in early trading but remains under pressure with the political uncertainties inthe Eurozone. In particular in France, where Macron surprisingly called a snap election. France’s Interior Minister Darmanin said that he could see civil unrest and violence related to the elections. The French election enters its last week of campaigning before its first round of vote.

Current level EUR/USD                1.0718           Up 0.25%

The GBP/EUR loss some ground as the BoE dovish pause increased expectations for a rate cut in August. However, the EUR could struggle due to uncertainties surrounding the French elections.

Current level GBP/EUR     1.1809(0.8466)        Down 0.15%

The GBP/USD edges higher this morning even though BoE August rate-cut bets increase.

Current levelGBP/USD                1.2649           Down 0.103%

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