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Monthly update: July 2022

July Performance: +3.95% YTD: -32.79%

A positive month for us with a +3.95% gain, no mean feat considering we are still navigating very choppy waters. Despite the hot US inflation data, the US Dollar struggled to find demand on Friday and the US Dollar Index (DXY) ended up closing the second straight week in negative territory.

The index stays relatively quiet below 106.00 at the time of writing (Monday 1st Aug) as investors wait for the ISM to release the Manufacturing and Services PMI reports for July. The European economic docket will feature the Unemployment Rate for June. In the early trading hours of the Asian session tomorrow (Tues), the Reserve Bank of Australia will announce its interest rate decision. Meanwhile, US stock index futures are down between 0.4% and 0.5%, pointing to a cautious market mood at the start of the week.

Earlier in the day, NBS Manufacturing PMI in China came in at 49, suggesting that the business activity in China's manufacturing sector contracted in July. The Non-Manufacturing PMI declined to 53.8 from 54.7 in June.

The data from the US showed that the Personal Consumption Expenditures (PCE) Price Index climbed to 6.8% on a yearly basis in June from 6.3% in May. The Core PCE Price Index, the Fed's preferred gauge of inflation, edged higher to 4.8% from 4.7% in the same period. The benchmark 10-year US Treasury bond yield, which lost nearly 4% last week, clings to modest daily gains early Monday, helping the dollar stay resilient against its rivals.

Despite the dollar's poor performance, EUR/USD struggled to gather bullish momentum and closed the previous week virtually unchanged a little above 1.0200. The pair continues to fluctuate above that level in the early European session. The data from Germany showed on Monday that Retail Sales contracted by 1.6% on a monthly basis in June, missing the market expectation for an increase of 0.2% by a wide margin.

GBP/USD rose more than 150 pips last week and managed to build on last week's gains at the beginning of the week. The pair was last seen trading in positive territory near 1.2200.

USD/JPY trades at its lowest level since mid-June and continues to push lower toward 132.00.

Thank you for your continued trust and patience, I am doing all I can to try and recover the losses from the previous months. It may not be possible to get us into profit by the end of the year but I am trying my hardest.

Best regards,

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