Daily Market Update

Dollar Gains v. G10; Reaches 1-Month High

June 30, 2020

The U.S. dollar looks to end the quarter on the front foot. Indeed, the greenback is stronger against most of its rivals this morning and the Bloomberg Dollar Index rose to a one-month high.

Overview

Global markets are slightly lower today which may be a result of more stark warnings from the World Health Organization.  As Covid cases rise in the U.S. and other countries, the WHO warned that the worst is yet to come.

The Euro ticked a touch lower as well despite data that showed eurozone inflation experienced a slight move higher.

There is only second tier data out this morning, but all eyes will be on Capitol Hill this afternoon.  Fed Chairman Jerome Powell will contend that the future of the economy is “extraordinarily uncertain” when he testifies before the Financial Services Committee.  On the fiscal side, Treasury Secretary Steve Mnuchin will join Powell.

 

What to Watch Today…

  • Powell on Capitol Hill at 12:30 p.m.

Complete Economic Calendar can be found here.

 

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AUD

The Australian dollar saw a quick, sharp sell-off in early trading as news of a new outbreak in Australia spooked investors.  AUD/USD fell as much as 0.7% before recouping some of those losses when Australia announced a new four-week lockdown in parts of Melbourne.

The New Zealand dollar and the Norwegian krone joined the Aussie as the worst-performing currencies versus the U.S. dollar.

 

GBP

The British pound also slipped against the U.S. dollar overnight but is finding some support following a speech by British Prime Minister Boris Johnson’s speech on the recovery of the U.K.  Johnson promised to “build, build, build” and accelerated the 5 billion pounds of previously announced spending plans.  As expected, Johnson spoke about the need to invest in hospitals and schools.  He was light on how the government plans to pay for the projects and deferred questions about tax increases.  Instead, he contended that it was time to borrow and spend.

Johnson did not appear to promise more fiscal stimulus, which could be the reason GBP/USD found a short-term floor.

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