Dollar rises on continued safe-haven buying

 Market Review - 20/06/2020 03:21GMT  

Dollar rises on continued safe-haven buying

The greenback continued its recent winning streak and ended higher against its G5 peers to a 2-week peak, except safe-haven Japanese yen on safe-haven buying of usd. Cable tumbled to a near 3-week trough as Brexit concern continued to weigh on sterling.  
  
In other news, Reuters reported European Central Bank head, Christine Lagarde, told European Union leaders on Friday that their economy was in a "dramatic fall" and called on the bloc to act to spearhead revival, diplomatic sources and officials said.    She said the euro zone economy was headed for a "sharp decline" of some 13% in the second quarter and reiterated the bank's forecasts for a GDP drop of 8.7% in 2020 and a rebound of 5.2% in 2021.  
  
Versus the Japanese yen, although dollar retreated from 107.05 in Australia to 106.80 in Asia on active safe-haven jpy buying due to geopolitical tensions between China/India and U.S./China, price rebounded to 106.99 at European open but only to weaken to 106.77 at New York open on usd's weakness. The pair then recovered to 107.03 on rise in U.S. stocks before easing of renewed yen buying.  
  
The single currency rebounded from 1.1200 at Asian open to 1.1221 at European open and despite falling to 1.1195, the pair briefly rallied to 1.1254 at New York open on usd long liquidation. However, price quicked erased intra-day gaiin and later hit dropped to a 2-1/2 week low of 1.1169 on usd's strength before swinging sideways. Price last traded at 1.1177 near the close.  
  
Reuters reported EU leaders remain divided on how to structure a proposed COVID-19 recovery fund for European economies, the head of the European Commission said on Friday, with the balance of loans and grants still to be agreed.    
  
Although the British pound rose from 1.2405 at Asian open to session highs of 1.2456 at European open due to robust UK retail sales, cable erased intra-day gains and easily penetrated Thursday's 1.2403 low and tumbled to 1.2361 on cross-selling in sterling before rebounding in tandem with euro to 1.2412 at New York open but only to fall again to a 2-1/2 week low of 1.2344 in late New York.   
  
Reuters reported sales volumes in May jumped by a record 12.0% after a historic 18.0% slump in April - a rise at the top end of economist forecasts in a Reuters poll but which still leaves retail sales 13.1% down on a year ago.    And the European Union is committed to clinching an agreement with Britain on its future relationship with the bloc it left at the end of January, but not at any cost, European Council President Charles Michel said on Friday after a meeting of EU leaders.   
  
Data to be released this week:  
  
UK CBI trends orders, U.S. national activity index, existing home sales and EU consumer confidence on Monday.  
  
Australia manufacturing PMI, services PMI, Japan Jibun bank manufacturing PMI, France Markit manufacturing PMI, Markit services PMI, Germany Markit manufacturing PMI, Markit services PMI, EU Markit manufacturing PMI, Markit services PMI, UK Markit manufacturing PMI, Markit services PMI and U.S. Markit manufacturing PMI, Markit services PMI, building permits, redbook, new home sales, Richmond Fed manufacturing index on Tuesday.  
  
New Zealand RBNZ interest rate decision, Japan leading indicator, coincident index, France business climate, Germany Ifo business climate, Ifo current conditions, Ifo expectations, Swiss investor sentiment and U.S. MBA mortgage application, monthly home price on Wednesday.  
  
New Zealand imports, trade balance, exports, China market holiday, Germany GfK consumer sentiment, Italy trade balance, UK CBI distributive trades, U.S. durable goods, durables ex-transportation, durables ex-defense, GDP, GDP deflator, core PCE price index, PCE prices, goods trade balance, wholesale inventories, initial jobless claims, continued jobless claims, KC Fed manufacturing and Canada average earnings on Thursday.  
  
Japan Tokyo CPI, Tokyo core CPI, China market holiday, Italy GDP, manufacturing business confidence, consumer confidence and U.S. personal income, personal spending, core PCE price index, PCE price index, University of Michigan sentiment on Friday.