July 2024 Update On Foreign Exchange Markets
RegencyFX give their monthly update on developments in the foreign exchange markets. The foreign exchange market saw significant swings in July 2024, driven by a range of economic metrics and geopolitical developments.
The International Monetary Fund (IMF) indicated that the growth rate of the world economy remained stable at roughly 3.2%. However, persistent inflationary pressures impacted currency valuations and trading strategies in several industrialised nations, most notably the US and the EU.
British Pound (GBP): Political turbulence surrounding the impending elections and its possible influence on fiscal policies contributed to the pound’s volatility. Notwithstanding these difficulties, the pound held its value relative to the euro and the dollar while investors assessed the possible effects of the new Labour government.
US currency (USD): Thanks to healthy employment data and a resilient economy, the US currency maintained its strength throughout July. The Federal Reserve’s measured approach to interest rate changes contributed to the preservation of investor faith in the dollar despite worries about inflation. The Fed’s indication that rates would probably stay on hold for the foreseeable future helped to keep the value of the dollar relative to other major currencies steady.
Euro (EUR): As the Eurozone’s economic development appeared to be slowing down, the euro faced difficulties. The euro lost value in relation to the dollar because of the European Central Bank’s (ECB) recent interest rate reductions intended to boost economic expansion. Traders were keeping a careful eye on ECB communications for any clues about potential changes to monetary policy in the future, given the persistent concern over inflation.
It was the Australian dollar’s (AUD) first monthly slide since April, as it saw a significant decrease vs the US currency (USD). This month, the value of the Australian dollar (AUD) fell by 1.9%, from a six-month high of almost 67.8 US cents to less than 66 US cents. The US dollar index fell by 1.7% during the same period, indicating a general weakening of the USD, despite this loss.
Overall, July was characterised by volatility driven by economic data and political changes in both the U.S. and UK markets. The interplay between these factors will likely continue to shape currency movements as traders assess future monetary policy directions.
Currency ranges in July
GBP/EUR
High: 1.1925 on July 17, 2024.
Low: 1.1796 on July 2, 2024.
GBP/USD
High: 1.3042 on July 17, 2024.
Low: 1.2642 on July 2, 2024.
GBP/AUD
High: 1.9797 on July 31, 2024.
Low: 1.8950 on July 5, 2024
EUR/USD
High: 1.0942 on July 17, 2024.
Low: 1.0717 on July 2, 2024.
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