Market Review - 29/06/2020 23:54GMT
Dollar regains traction in New York on safe-haven buying
The greenback pared its losses made in Asia and European morning and ended the day higher against majority of its peers on Monday on usd-buying ahead of quarter end together with continued fears over a second wave of coroanvirus pandemic. Sterling fell across the board as EU-UK intensive five-weeks Brexit negotiations began.
Versus the Japanese yen, dollar rebounded from 107.09 in New Zealand to 107.37 in Asia morning and despite retreating to 107.05, the pair later rallied to a 19-day high at 107.88 in New York on renewed usd's strength as well as rise in U.S. equities (Dow Jones ended the day higher by 580 points at 25595) before moving sideways.
The single currency found renewed buying at 1.1216 in New Zealand and rose to 1.1246 in Asian morning and then ratcheted higher to 1.1267 shortly after European open on cross-buying in euro before retreating to 1.1241 due to profit-taking. However, the pair then rallied to session highs at 1.1288 but only to weaken to 1.1220 in New York on usd's strength. The pair the moved narrowly and traded at 1.1241 near the close.
Reuters reported the European Central Bank (ECB) will support efforts of the Bundesbank in convincing German authorities that its government bond purchases are needed and proportional, ECB President Christine Lagarde said in a letter published on Monday.
On the data front, Reuters reported the recovery of economic sentiment in the euro zone intensified in June after a modest pick-up in May, with improvements across all sectors and a much more buoyant sense of future business, European Commission data showed on Monday. Overall sentiment rose to 75.7 points in June from 67.5 in May, still short of market expectations of 80.0 and well below the average of 100 since 2000.
The British pound went through a volatile session. Although cable rose in tandem with euro from 1.2327 in New Zealand to session highs at 1.2389 at European open, price erased intra-day gains and fell to 1.2304 on sterling's broad-based weakness on concern over UK government's infrastructure program as well as continued fear of a hard Brexit as the European Union and United Kingdom began an intensive five weeks face-to-face negotiations before rebounding to 1.2330 at New York open but only to tumble to a 1-month low at 1.2252. The pair then recovered to 1.2300 on short-covering.
Reuters reported Britain will be ready to quit its transitional arrangements with the European Union "on Australia terms" if no deal on their future relationship is reached, Prime Minister Boris Johnson told his Polish counterpart Mateusz Morawiecki on Saturday. And he planned to double down on his plans to increase public investment and a return to austerity would be a mistake as the country tries to recover from the coronavirus hit to the economy.
Data to be released on Tuesday :
Japan unemployment rate, industrial output, construction orders, housing starts, China NBS non-manufacturing PMI, NBS manufacturing PMI, New Zealand NBNZ business outlook, NBNZ own activity.
UK GDP, current account, Swiss retail sales, KOF indicator, France consumer spending, CPI (EU norm), CPI, producer prices, Italy consumer price index, CPI (EU norm), producer prices, EU HICP, core HICP, U.S. redbook, CS home price index, Chicago PMI, consumer confidence.
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