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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EUR/USD holds firm above 1.1900 as US NFP looms

EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage.

GBP/USD remains above nine-day EMA near 1.3650

GBP/USD recovers its recent losses from the previous session, trading around 1.3680 during the European hours on Wednesday. The technical analysis of the daily chart indicates a sustained bullish bias, as the pair trades within an ascending channel pattern.

Gold sticks to gains near $5,050 as focus shifts to US NFP

Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release.

US Nonfarm Payrolls expected to show modest job gains in January

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S&P 500 at 7,000 is a valuation test, not a liquidity problem

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Bitcoin price slips below $67,000 ahead of US Nonfarm Payrolls data

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