Forex Today: Growth figures to catch investors’ eye

Here is what you need to know on Monday, July 27:

Dollar’s sell-off extended into the weekly close, as risk-aversion was unable to trigger flows to the American currency. Tensions between the US and China, and the coronavirus developments in the world’s largest economy, were the main reason behind the greenback’s weakness. According to weekend news,  Florida surpassed New York in confirmed coronavirus cases. The country reported over 67,000 new contagions on Saturday, and the death toll surpassed 149K.  Meanwhile, in Europe, a second wave is hitting Spain and Germany.

The preliminary estimates of businesses output for July were mostly upbeat outside the US with Australia, the UK and Europe returning to growth. The figures, however, fell short of backing equities, which closed in the red worldwide.

The shared currency soared, backed by hopes surrounding the EU recovery fund agreed last week. The Pound, on the other hand, advanced just modestly amid persistent Brexit-jitters. Seems unlikely the EU and the UK will reach a trade deal before year-end, according to EU’s chief negotiator, Michel Barnier.

Safe-haven JPY and CHF appreciated sharply against the greenback. Commodity-linked currencies, on the other hand, were trapped between the dollar’s weakness and the poor performance of equities.

Gold soared, setting at around $1,900 a troy ounce, its highest since September 2011. The bright metal trades roughly $20.00 below its all-time high.

BTC/USD jumps above $10,000 only to retreat back to $9,980

Focus this week:

The US Senate keeps discussing an aid and fiscal package to maintain the economy afloat throughout the pandemic.

The US Federal Reserve will have a monetary policy meeting. The central bank is unlikely to add to its massive stimulus. Instead, investors will focus on growth forecasts.

Tensions between China and Beijing had not yet touched the trade relationship between the two economies. Panic selling could take over the financial world if the war of words turns into trade.

The EU and the US will publish their respective preliminary estimates of Q2 GDP. Growth is in the eye of the storm within a pandemic context. The depth and length of the economic setback are still unclear.