Forex Today: Risk rides the Navarro rollercoaster, Eurozone/ UK PMIs, virus stats in focus


Here is what you need to know on Tuesday, June 23

The US dollar showed some signs of life amid a wild Asian ride this Tuesday, as the risk sentiment swung dramatically on the US-China trade deal mix-up. The market mood turned upbeat once again after US Pres. Donald Trump assured markets that the trade deal is fully intact. 

White House Trade Adviser Peter Navarro said in a Fox News interview in early Asia that the trade deal with China has fallen apart. He quickly walked back on his comments and clarified that the trade deal remains unchanged while speaking to the Wall Street Journal (WSJ).

Asian stocks and the US equity futures regained the lost ground, benefiting from the Wall Street rally and Trump’s confirmation. Meanwhile, the US Treasury yields traded with modest gains. Expectations on the potential US and Spanish fiscal stimulus bolstered risk trades, which overshadowed looming concerns over the second-wave of coronavirus in the US, China, Australia and South Korea.

Across the fx space, the risk-on mood dominated and drove USD/JPY beyond 107.00.  AUD/USD jumped back to test the multi-day highs of 0.6935 while the kiwi remained capped below 0.6500, as attention turned towards Wednesday’s RBNZ rate decision.

EUR/USD consolidated below 1.1300, with the upside stalled ahead of the Eurozone Preliminary PMIs. GBP/USD pared back gains to trade below 1.2500 ahead of the UK Preliminary PMIs and BOE Governor Bailey’s speech.

Gold prices refreshed monthly highs just above $1760 before turning neutral around $1755. WTI cracked the 41 barrier for the first time in three months but failed to resist above it heading into the API data release.

Cryptocurrencies consolidated the recent surge, with Bitcoin holding up above $9600.

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