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EURUSD Lower on July Rate Hike News, U.S. Jobless Claims Report Worries Investors & Japan Gets Ready to Welcome Tourists Again

ECB hold rates, but confirming July hike

On Thursday, the ECB opted to keep rates unchanged in June, but signaled that a hike would come next month.

Following a highly anticipated policy meeting, the bank confirmed that it will likely end QE on July 1st, making way for a 0. 25%rate hike July 21st.

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A statement from the bank read, “based on its current assessment, the Governing Council anticipates that a gradual but sustained path of further increases in interest rates will be appropriate”.

The bank’s President Christine Lagarde added that, “We will make sure that inflation returns to our 2% target over the medium term”.

EURUSD dropped to an almost three week low on the news.

U.S. initial jobless claims hit 5-month high

Jobless claims in the United States rose to a five month high on Thursday, as labour market growth begins to slow.

Figures released on Thursday showed that claims for unemployment benefits rose by 27,000 to 229,000, for the week which ended June 4th.


source: tradingeconomics.com

 Today’s number is the highest since the start of the year, and is higher than analysts’ expectations for a total of 210,000 applications for the latest week.

This follows on last Friday’s Non-farm payrolls which came in almost 30,000 lower than April’s number.

As of writing, the S&P 500 is 0.65% lower.

Yen gains, as Japan set to welcome back tourists

The Japanese fell against the U.S. Dollar in today’s session, as the country looks set to re-open its borders.

Since the start of the COVID-19 pandemic, Japan opted to go into full lockdown, and only recently began to welcome business travelers.

However, from tomorrow, the country will now be allowing foreigners to enter its shores, should they be coming via packaged tours.

Despite this, domestic travel still remains the priority, as it accounts for 80% of all tourism in the country.

USDJPY fell to a low of 133.18 on Thursday.

“Never, ever argue with your trading system.”

-Michael Covel.

Eliman Dambell

Senior Market Analyst