What you need to know on Wednesday, July 7:
The greenback appreciated sharply against most major rivals, as risk-aversion took over financial markets. Following a long weekend in the US, Wall Street plummeted, after US data was softer than anticipated, somehow suggesting slowing US economic growth. The Japanese yen was the exception, appreciating against the dollar and currently trading around 110.60.
US government bond yields were also sharply lower. The yield on the 10-year Treasury note fell to 1.35% and settled at 1.36%.
EUR/USD flirted with the 1.1800 level, bouncing modestly to settle around 1.1820. The GBP/USD stands at 1.3800. Commodity-linked currencies plunged during the US afternoon, trimming early gains.
Gold traded as high as $1,815 a troy ounce but settled below the 1,800 threshold. Crude oil prices retreated from multi-year highs, and closed dip in the red, with WTI ending the day at $73.65 a barrel. OPEC+ does not yet reach an agreement on oil output.
Concerns about the spread of the coronavirus Delta variant added to the dismal market’s mood. Most European countries are anticipating a new covid wave for August. Some cities are already taking measures, ahead of it. In the UK Health Minister Sajid Javid noted that new cases could soon rise above 100,000 a day but agreed with Johnson on lifting restrictions on July 19.
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