FX Update – June 2 – Weaker USD

<h3>AUDUSD, H1</h3>
<p>The <strong>Dollar</strong> has remained soft, with risk sentiment in global markets holding up, albeit with a weakening grip. Wall Street finished with modest gains yesterday, while the <strong>USA500</strong> is moderately in the negative, and while Asian and European markets have gained, they are up by only a limited extent. <strong><em>US President Trump is weighing military action</em></strong> and imposing curfews in cities across the country in an effort to quell rioting, while there are glass-half-full market narratives arguing that, with many assets having recouped to pre-pandemic levels, there may be less upside potential with most economies across the world not expected to fully recover until such time as there is a vaccine or cure for the coronavirus.</p>
<p><a href="https://analysis.hotforex.com/wp-content/uploads/2020/06/2020-06-02_12-06-36.jpg"><img class=" wp-image-137604 aligncenter" src="https://analysis.hotforex.com/wp-content/uploads/2020/06/2020-06-02_12-06-36-300×262.jpg" alt="" width="473" height="413" srcset="/wp-content/uploads/2020/06/2020-06-02_12-06-36-300×262.jpg 300w, /wp-content/uploads/2020/06/2020-06-02_12-06-36-768×671.jpg 768w, /wp-content/uploads/2020/06/2020-06-02_12-06-36-696×608.jpg 696w, /wp-content/uploads/2020/06/2020-06-02_12-06-36-481×420.jpg 481w, /wp-content/uploads/2020/06/2020-06-02_12-06-36.jpg 785w" sizes="(max-width: 473px) 100vw, 473px" /></a></p>
<p>Despite the flagging risk-on tone, the narrow trade-weighted <strong>USDInde</strong>x edged out a new low, at 97.74, which is the lowest level seen since March 16th. <strong>EURUSD</strong> has remained buoyant, and has breached yesterday’s 11-week high at 1.1155, to trade to 1.1178. <strong>USDJP</strong>Y remained in a narrow range in the mid-to-upper reaches of the 107.00s, which has been the case for about two weeks now. Sterling has outperformed on Brexit-related news, with the London Times reporting that the UK government is expected to signal a compromise on fisheries and “level playing field” trade rules if the EU backs off from its “maximalist” demands on regulatory alignment and fishing access, according to unnamed sources. Cable printed a one-month peak at 1.2555, while <strong>EURGBP</strong> fell to an 18-day low at 0.8865. <strong>AUDUSD</strong> edged out a fresh four-month high, at 0.6844. The RBA did the expected and left monetary policy unchanged at its June review today, maintaining the cash rate at 0.25%, while signalling that “the accommodative approach will be maintained as long as it is required.” <strong>USDCAD</strong> printed a fresh trend low at 1.3507, the lowest seen since March 9th. The Canadian Dollar, like other oil-correlating currencies, remains supported by the ongoing buoyancy in oil prices, ahead of the rescheduled OPEC+ meeting this week, while <strong>USOil</strong> trades at $36.00 currently.</p>
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<p><strong>Stuart Cowell</strong></p>
<p><strong>Head Market Analyst</strong></p>
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