Forex Today: EU leaders can’t reach an agreement on the EU rescue fund

Here is what you need to know on Monday, July 20:

The American dollar retains its weakness amid concerns related to surging coronavirus cases in the US. Despite the government refuses to return to strict lockdowns, concerns are on the long-lasting effects on the economy, as unemployment levels remain stubbornly high, while consumer confidence shrunk again in July.

On Friday, US Treasury Secretary Mnuchin said that the federal government should weigh forgiving all “small” loans provided under the Paycheck Protection Program during the coronavirus pandemic, although he didn’t clarify what he considers “small.”

 Over the weekend, finance officials from the G-20 vowed to continue using “all available policy tools” to fight the coronavirus pandemic and bolster the global economy, noting that that the outlook remains highly uncertain.

 EU leaders extended talks throughout the weekend, in an attempt to agree on a coronavirus recovery fund. On Saturday,  Council President Charles Michel proposed to shift €50 billion in funding from grants to loans, in an attempt to break the deadlock. However, Sunday comments from German Chancellor Merkel and Greek Prime Minister Kiriakos Mitsotakis, indicated that they didn’t make enough progress in reaching an agreement.

The shared currency advanced against its American rival, but the Pound weakened, amid no progress in Brexit talks and speculation the BOE will opt for negative rates, as policymakers are unwilling to extend QE.

Commodity-linked currencies and the JPY  remained confined to tight weekly ranges against the dollar. The spike in coronavirus cases in the US alongside new outbreaks in Asian and Europe spur concerns about a long way ahead of an economic comeback.

Commodities remained in consolidative mode. WTI settled a few cents above $40.00, not far from its June high. Gold finished the week with modest gains around $1,810 a troy ounce.