What you need to know on Friday, July 23:

The greenback ended Thursday mostly lower across the FX board, although higher against the EUR. The ECB was the main event of the day. As widely anticipated, the central bank decided to leave the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively. Policymakers reaffirmed that the PEPP would continue to run significantly faster than at the beginning of the year.

On the so-long awaited new forward guidance, the Government Council noted that interest rates will remain at present or lower levels “until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realised progress in underlying inflation is sufficiently advanced.”

Asian and European equities advanced, but Wall Street struggled to post modest gains. Softer-than-anticipated US macroeconomic figures dented the market’s mood. US Treasury yields peaked at fresh weekly highs but finished the day in the red.

The Australian dollar was the best performer among commodity-linked currencies, flirting with the 0.7400 level, while the CAD was the worst, ending the day unchanged vs the greenback.

Gold recovered modestly after a soft start of the day, ending the day at around $1,807. Crude oil prices edged firmly up, with WTI ending the day at $71.80 a barrel.

The focus on Friday will be on growth-related data as Markit will release the preliminary estimates of its July PMIs for the EU and the US.

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