Europe Roundup: Pound hovers near one-year high, European shares rise ,Gold steady , Oil prices slip on rising U.S. crude stocks and easing middle east tensions

Market Roundup

•UK Jul Public Sector Net Borrowing 2.18B, 0.50B forecast,12.55B previous 

•UK Jul Public Sector Net Cash Requirement 19.232B, 6.490B previous

Looking Ahead Economic Data (GMT)

• 12:30 Canada Jul IPPI (YoY) 2.8% previous

• 12:30 Canada Jul IPPI (MoM) -0.3% forecast, 0.0% previous 

• 12:30 Canada Jul New Housing Price Index (MoM) 0.0% forecast, -0.2% previous  

• 12:30 Canada Jul RMPI (YoY)  7.5% previous 

• 12:30 Canada Jul RMPI (MoM) -0.7% forecast, -1.4% previous 

•14:00 US Payrolls Benchmark, n.s.a. -187.00K previous 

•14:30  US Crude Oil Inventories -2.000M forecast, 1.357M previous   

Looking Ahead Events And Other Releases (GMT)

•18:00 FOMC Meeting Minutes

Currency Forecast

EUR/USD: The euro saw a slight decrease against the U.S. dollar on Wednesday as market participants prepared for important updates to U.S. payrolls data expected later in the day. Traders are also anticipating Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole economic symposium on Friday. Powell's remarks will be scrutinized for any indications regarding the potential size of a rate cut in the upcoming month and the possibility of further reductions in borrowing costs at future Fed meetings.Clear signals of U.S. rate cuts could invigorate risk assets globally, especially as concerns about the performance of the U.S. economy have recently diminished. However, traders remain cautious, watching for any developments that could influence market dynamics.Immediate resistance can be seen at 1.1119(23.6%fib), an upside break can trigger rise towards 1.1135(Dec 2023 high).On the downside, immediate support is seen at 1.1074(Daily low), a break below could take the pair towards 1.1054(38.2%fib).

GBP/USD: The pound steadied on Wednesday near the one-year high it touched against the dollar the previous day, with the U.S. currency under pressure from rising expectations of Federal Reserve interest rate cuts.A fall in the dollar has been driving currency markets in recent days, as investors increasingly bet that the Fed will cut interest rates relatively sharply this year.Sterling was little changed on Wednesday at $1.3025, having touched its highest versus the dollar since July 2023 on Tuesday at $1.3054..Immediate resistance can be seen at 1.3047(23.6%fib), an upside break can trigger rise towards 1.3100 (Psychological level).On the downside, immediate support is seen at 1.2973(38.2%fib), a break below could take the pair towards 1.2916(50%fib).

USD/CHF: The dollar steadied against the Swiss franc on Wednesday as investors looked forward to clearer guidance from the Federal Reserve on the potential magnitude of future interest rate cuts.This week, all eyes are on remarks from Federal Reserve policymakers, particularly Chair Jerome Powell, who is scheduled to speak on Friday. These comments, coupled with the minutes from the Fed's July policy meeting set to be released on Wednesday, are expected to shape expectations regarding the extent and pace of future rate cuts by the U.S. central bank. Immediate resistance can be seen at 0.8617 (38.2%fib), an upside break can trigger rise towards 0.8713(50%fib).On the downside, immediate support is seen at 0.8489(23.6%fib), a break below could take the pair towards 0.8419(Lower BB).

USD/JPY: The dollar edged higher against the yen on Wednesday as traders anticipated Federal Reserve Chair Jerome Powell's comments later this week. Additionally, focus is on a special session of Japan's parliament on Friday, where politicians will scrutinize the Bank of Japan's (BOJ) unexpected interest rate hike last month and its sudden hawkish shift. BOJ Governor Kazuo Ueda is set to testify, with particular attention on his tone following the more dovish stance recently adopted by his deputy, Shinichi Uchida. A poll published on Wednesday revealed that more than half of economists expect the BOJ to raise rates again this year, with most predicting a potential increase in December. Strong resistance can be seen at 147.26(Daily high), an upside break can trigger rise towards 147.97(38.2 %fib). On the downside, immediate support is seen at 145.17(23.6 %fib), a break below could take the pair towards 145.00(Psychological level).

Equities Recap

European shares edged up on Wednesday buoyed by gains in miners, while investors awaited the minutes of the U.S. Federal Reserve's July meeting to gauge the direction of global monetary policy.

The UK's benchmark FTSE 100 was up  by 0.23 percent, Germany's Dax was up by 0.53 percent, and France’s CAC was  up by 0.47 percent.

Commodities Recap

Oil prices dropped on Wednesday as U.S. crude inventories increased and expectations grew that Middle East tensions were easing following a diplomatic tour of the region by mediator's.

Brent crude futures remained stable at $77.20 per barrel as of 0806 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude was trading at $73.10 per barrel, marking a slight decline of 7 cents.

Gold prices were trading below record highs on Wednesday following a rally driven by Western fund inflows and optimism surrounding potential U.S. interest rate cuts. Investors were cautiously awaiting the minutes of the Federal Reserve's latest meeting to gain more clarity on the extent of potential rate cuts.

Spot gold remained unchanged at $2,514.03 per ounce after reaching an all-time high of $2,531.60 on Tuesday. Meanwhile, U.S. gold futures saw a slight increase of 0.1%, rising to $2,551.80.