Forex Today: Optimism smashes the dollar

FXStreet Team FXStreet

Here is what you need to know on Tuesday, July 7:

The American dollar was the worst performer at the beginning of the week, undermined by risk-appetite. Chinese stocks led the way higher, amid local authorities pushing a bullish market, optimistic about an economic comeback. US services output beat the market’s expectations, further fueling the appetite for risk.

The EUR/USD pair hit a fresh multi-week high of 1.1345, unable to extend gains but holding above the 1.1300 level at the end of the day. The Pound, on the other hand, was a lager, ending the day unchanged against the greenback just below the 1.2500 figure.

U’s chief negotiator Michel Barnier arrived in London for another round of face-to-face talks. No progress has been reported, and the market has little hopes on the matter being solved soon.

US Treasury yields run on the back of upbeat services data, but trimmed gains ahead of the close, ending the day flat.

The number of new coronavirus cases in the US seems to be decreasing. The country may well be passing the peak. Not yet confirmed, it may result in further dollar’s weakness and Wall Street reaching new all-time highs.

Gold prices neared their recent multi-year highs, ending the day at $ 1,786 a troy ounce, while crude oil prices maintained the status-quo, with WTI settling around $40.00 a barrel.

The Australian dollar was among the best performers, trading a few pips below the 0.7000 ahead of the RBA monetary policy meeting.

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EUR/USD flat lines below 1.1900; divergent Fed-ECB expectations offer support

The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.1835-1.1830 region and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.1875 area, remaining nearly unchanged for the day and staying within striking distance of an over one-week high, reached on Tuesday, amid mixed cues.

GBP/USD slips heading into the Thursday trading window

The Pound Sterling pulled back from four-year highs on Wednesday, weighed down by a combination of Bank of England dovishness and UK political uncertainty, even as the US Dollar weakened on soft labor market revisions.

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.

Crypto trades through a confidence reset

The cryptocurrency market is navigating a liquidity-driven reset rather than a narrative-driven rally. Bitcoin, Ethereum and major altcoins remain under pressure even as new exchange-traded fund filings continue and selected inflow days appear on the tape.

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.