Forex Today: Dollar on the backfoot

FXStreet Team FXStreet

Here is what you need to know on Tuesday, June 23:

The dollar edged lower this Monday, losing ground, particularly in the US afternoon. Mixed data and coronavirus cases in the country surging at “unacceptable levels,” according to Texas governor, were behind the greenback’s slide.

The EUR/USD pair closed the day with gains around 1.1250. Consumer Confidence came in better-than-expected. ECB’s Vice President De Guindos said that the Governor Council would continue to evaluate PEPP, are there are substantial downside risks, in particular, if the easing of containment measures turns out to be premature. He added that he expects economic activity to rebound in the second half of the year.

The GBP/USD pair settled around 1.2460, near its daily high, amid broad dollar’s weakness by the end of the day BOE Governor´s Andrew Bailey hit the wires on Monday, and he said that the central bank would need to reduce its balance sheet before raising rates significantly, indicating that “elevated balance sheets could limit the room for manoeuvre in future emergencies.”

News made the rounds about the US preparing a new stimulus package of over $1 trillion. Infrastructure spending could include rural broadband on top of traditional spending if included in the bill as it looks like it will, plus unemployment extension and return to work incentives, according to FOX news.

Asian and European equities closed in the red, although Wall Street managed to close the day in positive territory. Commodities were the best performers, with spot gold flirting with $1,760.00 a troy ounce and WTI ending the day above $40.00 a barrel.

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FXStreet Team

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EUR/USD weakens as US jobs data trims Fed rate cut bets

The EUR/USD pair trades in negative territory for the third consecutive day near 1.1860 during the early European session on Thursday. Traders will keep an eye on the US weekly Initial Jobless Claims data. On Friday, the attention will shift to the US Consumer Price Index inflation report.

GBP/USD bullish outlook prevails above 1.3600, UK GDP data looms

The GBP/USD pair gains ground near 1.3635, snapping the two-day losing streak during the early European session on Thursday. The preliminary reading of UK Gross Domestic Product for the fourth quarter will be closely watched later on Thursday. The UK economy is estimated to grow 0.2% QoQ in Q4, versus 0.1% in Q1.

Gold down but not out as focus shifts to more US data

Gold is back in the red near $5,050 early Thursday, having faced strong offers at around the $5,100 mark once again. Buyers keep a close eye on the mid-tier US Jobless Claims data and US-Iran geopolitical developments to regain control.

UK GDP set to post weak growth as markets rise bets on March rate cut

Markets will be watching closely on Thursday, when the United Kingdom’s Office for National Statistics will release the advance estimate of Q4 Gross Domestic Product. If the data land in line with consensus, the UK economy would have continued to grow at an annualised pace of 1.2%, compared with 1.3% recorded the previous year.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

XRP sell-off deepens amid weak retail interest, risk-off sentiment

Ripple (XRP) is edging lower around $1.36 at the time of writing on Wednesday, weighed down by low retail interest and macroeconomic uncertainty, which is accelerating risk-off sentiment.