Forex Today: Risk-recovery back in play, US dollar recedes with second-wave virus fears

Here is what you need to know on Monday, June 22:

The US dollar reversed a part of last week’s gains after starting out the week on the front foot, as the risk-recovery mode returned in Asia. Beijing reported fewer new coronavirus cases and helped lift the market mood.

Wall Street turned south into the weekly close alongside the US stock futures after Apple Inc. announced re-closure to some stores in Florida, North Carolina, South Carolina, and Arizona due to intensifying fears over the coronavirus resurgence.

Asian stocks recovered early losses to trade flat while S&P 500 futures staged a solid comeback in a bid to close the bearish opening gap. Markets shrugged-off the UK terrorist attack, as expectations of the UK easing off the lockdown underpinned the sentiment.

Meanwhile, the Axios report that US President Donald Trump held-off on Xinjiang sanctions for China trade deal also calmed fears over the souring US-China diplomatic ties.

Within the G10 currencies basket, the Antipodeans gapped lower at the open before rebounding sharply in tandem with the risk tone. AUD/USD headed back towards 0.6900 while the kiwi eyed 0.6450. Traders shrugged-off RBA Governor Lowe’s bearish comments on the A$ and PBOC ‘no-rate change’ decision.

USD/JPY ranged between 107.00-106.75, divided between the virus concerns and the narrative on the global economic recovery.

EUR/USD bounced-off three-week lows to regain 1.1200 amid renewed dollar weakness and ahead of the European Union (EU)-China Summit and Bundesbank monthly report. The spike in Germany’s new infections and reproduction rate remains a cause of concerns for the EUR bulls.

GBP/USD extended the recovery briefly above 1.2400. UK Chancellor Rishi Sunak is expected to unveil further measures, including the Value Added Tax (VAT) reduction, in another effort to boost the economy.

Gold prices jumped to one-month highs near $1760 while crude oil prices also saw a fresh leg higher, with WTI reclaiming the $40 mark.

Cryptocurrencies traded on the front foot, with Bitcoin gearing up for a test of the $10K level.