Here is what you need to know on Thursday, July 2:
The American dollar edged lower against most major rivals, as the market mood improved, particularly in the final trading session of the day. The final versions of Markit Manufacturing PMIs were upwardly revised in Europe and the US, while the official US ISM Manufacturing index returned to expansion territory.
The EUR/USD pair remained within familiar levels, unable to surpass the 1.1270 level, weighed by comments from German Chancellor Angela Merkel who said that EU members are still far apart when discussing an EU recovery fund.
Drug giant Pfizer and the biotech firm BioNTech reported progress on a COVID-19 vaccine that spurred immune responses in healthy patients, although tests should continue. The news sustained investors’ optimism, although the US situation continues to deteriorate. The country keeps reporting over 40,000 new contagions per day. At the end of the day, California announced it will restrict indoor activity in 19 countries amid surging infections.
The FOMC released the Minutes of its latest meeting, which passed unnoticed. Policymakers remain on track to maintain their highly accommodative policy as long as needed to speed up the economic recovery.
Brexit tensions mount as German Chancellor Angela Merkel said that the European Union needs to be prepared for the possibility that they may not be able to reach an agreement with the United Kingdom. GBP/USD rallied anyway and settled near a daily high of 1.2490.
The USD/JPY pair retreated from a three-week high of 108.16 and settled around 107.50, despite the better market mood.
Wall Street closed mixed. The DJIA lost 70 points, but the Nasdaq settled at record highs.
Gold eased amid resurgent demand for high-yielding assets, ending the day at $1,770.00 a troy ounce. Crude oil prices were little changed daily basis, despite commercial crude oil inventories in the US decreased by 7.2 million barrels in the week ending June 26th, according to the Energy Information Administration weekly report.
This Thursday, the focus will be on the US, as the country will publish the Nonfarm Payroll report. The country is expected to have recovered 3 million jobs in the month, while the unemployment rate is seen contracting from 13.3% to 12.3%. Average Hourly Earnings are still seen well above average, although returning to pre-pandemic levels. The yearly figure is seen at 5.3% from 6.7% in the previous month.
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