Forex Today: Dollar in trouble as pandemic-related concerns were set aside
|Here is what you need to know on Tuesday, July 14:
Risk appetite dominated the financial world for most of this Monday, weighing on the American currency. The EUR/USD pair reached 1.1375, retreating ahead of the US close as Wall Street turned lower and closed in the red. There was no particular catalyst for equities slump, but profit-taking as the earnings season quick-starts this Tuesday.
The Pound was among the weakest, losing the 1.2600 level against the dollar way ahead of the U-turn in the market’s mood. No progress in Brexit talks and chatter about negative rates weighed on the Sterling.
The main theme is the ongoing pandemic. The number of global new coronavirus cases remains on the rise. Nevertheless, governments are trying to avoid new lockdowns, which somehow fueled the market’s positive sentiment throughout the day.
Also, the US FDA approved the Fast Track designation to the joint coronavirus vaccine efforts made by German BioNTech and US pharmaceutical Pfizer. Several vaccines seem to be making progress, another risk-on factor that got erased by equities slump at the end of the day.
China’s premier Li said that the economy is showing a steady recovery. The market took the headline with a pinch of salt. Additionally, China issued a travel advisory for Australia, with the ministry of foreign affairs citing racism, violence, and anti-Chinese sentiment.
The earnings season is starting this Tuesday with major banks Citigroup, JP Morgan, and Wells Fargo reports.
Commodities feel the heat at the end of the day but held within familiar levels. Gold settled at $1,804 a troy ounce, while WTI finished the day around $39.60 a barrel.
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