Forex Today: Technical recession is not a recession?

What you need to take care of on  Friday, July 29:

Thursday was another volatile day, with financial markets struggling for direction. The dollar remained under pressure during Asian trading hours, resurged during the European session and came again under pressure in the American afternoon.

The greenback’s intraday advance could be attributed to renewed recession-related fears following the release of tepid European data. The EUR/USD pair traded between 1.0113 and 1.0233 to finally settle at 1.0180.

The US published the second quarter Gross Domestic Product, which showed that the economy entered a technical recession after contracting by 0.9% in the three months to June and following a 1.6% contraction in Q1. However, stock markets ignored the news. US indexes soared and reached fresh multi-week highs, where they stand early in the Asian session.

Different US authorities diminished the relevance of the negative figure. Federal Reserve chief Jerome Powell anticipated it on Wednesday, saying that a disappointing GDP figure should be taken with a pinch of salt. US Treasury Secretary Janet Yellen said on Thursday that the Q2 contraction demonstrates the economy's move to more sustainable growth. Finally, President Joe Biden noted that Chair Powell and several other high-level banking executives claim that the US is not in a recession.

Also, Biden spoke with Chinese President Xi Jinping as part of US efforts to deepen lines of communication, responsibly manage differences, and address issues of mutual interest. There was no mention of tariff reduction.

Safe-haven assets were the best performers against the greenback. USD/CHF plunged to 0.944, while USD/JPY bottomed at 134.19, both trading nearby. Gold soared and now changes hands at $1,755 a troy ounce.

The GBP/USD pair maintained the bullish momentum and reached 1.2190, now hovering around 1.2165. Commodity-linked currencies posted modest intraday losses, helped by soaring equities. AUD/USD quotes at 0.6980 while USD/CAD is at 1.2820.

Crude oil prices eased, and WTI settled at $97 a barrel.

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