USD woes continue
|The narrow trade-weighted USDIndex edged out a 10-day low at 92.92, following its eighth consecutive weekly fall on Friday, before recovering the 93.00 handle. EURUSD correspondingly whittled out a 10-day peak at 1.1869, before moving back to 1.1840. Cable traded firmer from Friday’s closing level but remained comfortably shy of Friday’s high at 1.3144 and has moved under 1.3100. USDJPY ebbed to within 3 pips of Friday’s six-day low at 106.43.
AUDUSD lifted to a 10-day peak at 0.7196, as the best performer of the early week trades. The Kiwi dollar underperformed the Aussie buck on news that the upcoming general election is being delayed from September to October and the RBNZ dovishness from last week continues to weigh. Both Australia and New Zealand are in the drop of an upward infection rate curve of the coronavirus, reflecting the fact that community immunity has built up in those nations and with winter conditions, and the associated weakening of immune systems in the populace, exposing vulnerable groups.
USDCAD gave back more than half of the gains seen on Friday in making an intraday low at 1.3231. Oil prices remained buoyant, although in a narrow range and off recent highs. Gold prices continued to consolidate the sharp losses from recent record nominal highs, holding below $2,000.
The softer dollar hypothesis seems to still be in play in markets (negative Treasury yields, the more recent impact of the pandemic in the US relative to Europe and other parts of the world, the political stalemate over the new pandemic relief package, risks presented by US-China tensions, etc.), although seemingly weaker than seen during July, which is reflected by abating momentum in the dollar’s near five-month down trend. Incoming US data have been showing continued economic recovery alongside an up-tick in inflation, while the coronavirus curves of ICU admissions and mortalities are now dropping sharply, although the “case-demic” and “fear-demic” can be expected to continue (and with a political edge into the November presidential election). Preliminary Q2 GDP data out of Japan today confirmed the worse contracted on record, of -27.8% y/y. In China, the PBoC added 700 billion Yuan of one year funding, which drove an outperformance in Chinese stock indices today.
Little on the European calendar or agenda today to give direction as equities opened a tad higher and European bond yields have followed the US higher.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.