Dollar pares initial losses on risk aversion

Market Review - 13/07/2020 23:49GMT  

Dollar pares initial losses on risk aversion

The greenback pared its initial losses made in Asia and European morning on Monday on risk-averse buying in usd as U.S. stocks surrendered their intra-day gains after California Governor Newsom scaled back on the state's reopening, triggering fears of a second wave of the coronaviurs pandemic.    
Reuters reported California Governor Gavin Newsom on Monday ordered a massive retrenchment of the state's optimistic reopening on Monday, shutting bars and banning indoor restaurant dining statewide and closing churches, gyms and hair salons in hardest-hit counties.  
  
Versus the Japanese yen, although dollar initially fell from 106.96 in New Zealand to session lows at 106.79 in Asia, renewed buying interest emerged and the pair later rallied to an intra-day high of 107.31 on cross-selling in yen before retreating to 107.15.  
  
The single currency traded with a firm bias and rose from 1.1299 in New Zealand to 1.1336 in Asia on cross-buying in euro. Despite retreating to 1.1302 in European morning, the pair then rose to session highs of 1.1374 in New York before retreating to 1.1342 in late New York on usd's broad-based rebound.  
  
Although the British pound rebounded in tandem with euro from 1.2610 in New Zealand to 1.2666 in Asia, price erased intra-day gains and fell to 1.2593 in Europe on cross-selling in sterling due to Brexit uncertainty before recovering to 1.2638 in New York morning. However, cable met renewed selling there and tumbled to session lows at 1.2551 near New York closing.  
  
In other news, Reuters reported Germany's economy has passed its lowest point and the recovery process is starting, the economy ministry said on Monday.    A rise in industrial orders indicates that production will pick up in the coming months, but risks still exist, particularly in a very slack demand from non-euro zone, the ministry said in its monthly report.   
  
Data to be released on Tuesday :  
  
UK BRC retail sales, GDP, industrial output, manufacturing output, construction output, trade balance, NIESR GDP estimate, Australia NAB business conditions, NAB business confidence, China exports, imports, trade balance, Japan industrial output, capital utilization, France market holiday, Germany CPI, HICP, ZEW economic sentiment, ZEW economic conditions, Swiss producer/import price index, EU industrial production, ZEW survey expectation, and U.S. core CPI, CPI real weekly earnings, redbook.