Market Review - 12/08/2020 23:49GMT
Dollar falls as stimulus talks reach an impasse
The greenback erased intra-day gains made in Asia and began its intra-day descent in European morning and ended Wednesday lower against majority of its peers, except for the safe-haven Japanese yen due to standstill in negotiations between the Democrats and Republicans over coronavirus relief package.
Reuters reported U.S. House Speaker Nancy Pelosi on Wednesday said Democrats and the Trump administration remained far apart regarding any agreement over further economic aid amid the novel coronavirus pandemic, saying Republicans also seemed divided amongst themselves over relief efforts.
On the data front, Reuters reported the Labor Department said on Wednesday its consumer price index rose 0.6% last month after rebounding 0.6% in June. In the 12 months through July, the CPI accelerated 1.0% after climbing 0.6% in June. Economists polled by Reuters had forecast the CPI rising 0.3% in July and gaining 0.8% year-on-year.
Versus the Japanese yen, dollar found renewed buying at 106.45 in Australia and later rose to a fresh 2-week high at 107.01 at New York open on rise in U.S. Treasury yields before retreating to 106.69 on profit-taking. However, the pair then rebounded to 106.97 and then moved sideways.
Although the single currency continued its recent losing streak and fell to a 1-week low of 1.1712 in Asia, renewed buying interest emerged and price later rallied to session highs at 1.1816 in New York morning on usd's weakness before weakening to 1.1783 on profit-taking.
The British pound went through a roller-coaster ride. Cable initially fell from 1.3061 in Australia to 1.3017 in Asia before rising in tandem with euro to session highs of 1.3067 but only to drop to +a 1-week low at 1.3006+ at New York open on cross-selling in sterling, especially versus the single currency. The pair then rebounded again to 1.3060 and then swung broadly sideways.
Reuters reported Britain's economy shrank by a record 20.4% between April and June, when the coronavirus lockdown was tightest, the largest contraction reported by any major economy so far, official figures showed on Wednesday.
Data to be released on Thursday :
New Zealand food price index, UK RICS housing survey, Japan corporate goods price, machine tool orders, Australia employment change, unemployment rate, France ILO unemployment rate, Germany CPI, HICP, wholesale price index, and U.S. import prices, export prices, initial jobless claims, continued jobless claims.
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