Dollar ends lower ahead of Fed's decision and as coronavirus cases rise in the U.S

Market Review - 28/07/2020 23:53GMT  

Dollar ends lower ahead of Fed's decision and as coronavirus cases rise in the U.S.

Although the greenback recovered from a 2-year low in Asia and European morning, renewed selling emerged and dollar ended lower against majority of its peers on Tuesday due to continued fears over rise in coronavirus infections in the United States together with expectations that the Federal Reserve will maintain a loose monetary policy.  
  
Versus the Japanese yen, although dollar rebounded from 105.23 at Asian open to 105.68 on short-covering, renewed selling emerged and the pair later fell to a fresh 4-month low at 104.96 in New York morning on cross-buying in jpy together with selloff in U.S. Treasury yields before moving sideways.  
  
The single currency met renewed selling at 1.1773 in Asian morning and fell to 1.1700 in European morning on usd's broad-based recovery before rebounding to 1.1743. Despite weakening again to 1.1701, the pair then rebounded to 1.1742 in New York morning and then moved broadly sideways.  
  
The British pound went through a volatile session. Although cable re-tested Monday's high at 1.2904 in Asian morning, renewed selling interest emerged and knocked price down to session lows at 1.2839 in European morning on usd's recovery. However, the pair erased intra-day losses and later rallied to a fresh near 4-1/2 month high at 1.2952 in New York on cross-buying in sterling. Price then retreated to 1.2924 on profit-taking before stabilising.  
  
On the data front, Reuters reported the Conference Board said on Tuesday its consumer confidence index dropped to a reading of 92.6 this month from 98.3 in June. Economists polled by Reuters had forecast the index would drop to 94.5 in July.   
  
Data to be released on Wednesday :  
  
UK BRC shop price index, Australia CPI, German import prices, France sonsumer confidence, Italy producer prices, Swiss investor sentiment, and U.S. MBA mortgage applications, trade balance, wholesale inventories, pending home sales, FOMC interest rate decision.