Forex Today: Dollar defies “Turnaround Tuesday,” powers higher, covid, infrastructure news eyed

Yohay Elam FXStreet

Here is what you need to know on Wednesday, July 21:

Markets are calm after rebounding on Tuesday, while the US dollar remains on a strong footing. The Delta covid variant and US infrastructure news stand out. Bitcoin recaptures $30,000 and gold hovers above $1,800.

Comeback: US stock markets bounced on Tuesday and recaptured roughly all the losses incurred on Monday when the S&P 500 had its worst day since May. The advance in American shares carried other bourses higher but failed to depress the dollar, which has been holding onto its gains.

Concerns about the rapid spread of the Delta covid variant prevail in various parts of the world prevail. US 10-year Treasury yields are hovering around 1.20%, off the lows.

Vote: The US Senate will hold an early test vote on an infrastructure bill later in the day. It is still unclear if it receives support from Republicans or from Joe Manchin (D-WV) the most conservative Democrat in the upper chamber.

EUR/USD is trading around 1.1760, close to the lowest since April, as tensions mount ahead of Thursday's European Central Bank decision. The ECB could implement the dovish shift it presented in its strategic review.

ECB Preview: Three reasons why Lagarde could hit the euro when it is down

GBP/USD is struggling to hold onto 1.36, two days after ditching coronavirus-related restrictions. The EU and the UK remain at odds about the Northern Irish protocol and worries about Britain's growth remain prevalent after a survey from Lloyds showed concerns about inflation, capacity constraints and staff shortages.

AUD/USD extended its drop under 0.73 after Australia reported a disappointing drop of 1.8% in Retail Sales and after reports that cases continue rising in Australia's largest cities. Moreover, Australia's Prime Minister Scott Morrison admitted that his country's vaccination rollout was "regrettable."

USD/CAD has surpassed 1.27 as oil prices remain depressed and ahead of the weekly release of US Crude Oil Inventories. WTI is changing hands below $67.

Turnaround Tuesday: Why some currencies recovered and others didn't?

Gold is trading around $1,800, marginally higher after Goldman Sachs set a forecast of $2,000.

Gold Price Forecast: XAU/USD eyes a sustained move below $1800 amid bearish technicals

Cryptocurrencies: Bitcoin has recaptured the $30,000 and has been extending its gains toward $31,000. Ethereum is also benefiting from a bounceback, changing hands above $1,850.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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