FX Update – July 23 – USD Trends Lower

<p>The Dollar has continued to track lower, despite a backdrop of flagging stock markets in Asia, although US equities closed with moderate gains yesterday and S&amp;P 500 futures are showing a modest rise in overnight trading. The narrow trade-weighted USDIndex (DXY) printed a fresh four-and-a-half-month low at 94.82, drawing in on the early March low at 94.66, which was the lowest level seen since August 2018.</p>
<p><a href="https://analysis.hotforex.com/wp-content/uploads/2020/07/2020-07-23_11-44-39.png"><img class=" wp-image-153172 aligncenter" src="https://analysis.hotforex.com/wp-content/uploads/2020/07/2020-07-23_11-44-39-300×276.png" alt="" width="442" height="407" srcset="/wp-content/uploads/2020/07/2020-07-23_11-44-39-300×276.png 300w, /wp-content/uploads/2020/07/2020-07-23_11-44-39-456×420.png 456w, /wp-content/uploads/2020/07/2020-07-23_11-44-39.png 581w" sizes="(max-width: 442px) 100vw, 442px" /></a></p>
<p>EURUSD has been buoyant, though has remained below the 21-month high that was printed yesterday at 1.1601. The pair is amid its fifth week of an accelerating rally phase, underpinned both by broader dollar weakness (amid shifting risk premia in global markets) and broader euro outperformance (on the back of the EU recovery fund, seen as reducing Eurozone breakup risk while creating a new liquid AAA fund that will attract foreign investment). The common currency has been gaining against most other currencies recently, outside the case against the outperforming commodity currencies. The research team at Goldman Sachs is anticipating a further 10% gain in the Euro. EURJPY has seen a similar price action to EURUSD today, in holding off yesterday’s seven-week peak. Other euro crosses have also been steady.</p>
<p><a href="https://analysis.hotforex.com/wp-content/uploads/2020/07/2020-07-23_11-47-36.png"><img class=" wp-image-153182 aligncenter" src="https://analysis.hotforex.com/wp-content/uploads/2020/07/2020-07-23_11-47-36-300×273.png" alt="" width="428" height="388" /></a></p>
<p>Elsewhere, USDJPY has continued to ply a narrow range near the 107.00 level. Cable remained buoyant, settling in the lower 1.2700s, below Tuesday’s six-week high at 1.2768. The Pound has been trading more mixed against other currencies. AUDUSD has settled near 0.7150, so far holding below the 15-month high seen yesterday at 0.7183. A sharp drop in Australia’s Q2 business confidence survey had been widely anticipated, as was a downbeat economic update of the Federal government. USDCAD posted a fresh six-week low at 1.3378, with the Canadian Dollar firming concomitantly with oil prices. Front-month USOil lifted back above $42.00, drawing back in on Tuesday’s four-and-a-half-month high at $42.40.</p>
<p>Geopolitics remain a concern, as China blacked out English premier league games on Chinese television, and closed the US consulate in Chengdu in retaliation for the White House closing the Chinese consulate in Houston. President TRUMP said Chinese consulates in other US cities could come under investigation.</p>
<p>&nbsp;</p>
<p><strong>Click </strong><a href="https://www.hotforex.com/en/trading-tools/economic-calendar.html"><strong>here</strong></a><strong> to access the HotForex Economic Calendar</strong></p>
<p><strong>Stuart Cowell</strong></p>
<p><strong>Head Market Analyst</strong></p>
<p><strong>Disclaimer: </strong>This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.</p>

Leave a Comment

Leave a Reply

Your email address will not be published. Required fields are marked *