Daily Market Update

Greenback suffers losses, worst in 2 years

July 27, 2020

The U.S. Dollar suffered further losses over the weekend and got crushed during European and Asian market sessions based on lack of faith on a solution to COVID-19 and focus on other safe-haven assets.

Overview

Today’s Bloomberg Dollar Spot Index reached its nadir, lowest point since September 20, 2018. Gold continued to sky-rocket and reaching new record prices as economists scratch their heads about an end to the pandemic economic woes with not just the U.S. suffering, but countries like Spain and India seeing a return in flare-ups. The virus is indeed a killer of any positive market sentiment carrying from the last few weeks.

June Durable Goods Orders this morning did not disappoint with a registered growth of 7.3% over 6.9% expected. On the docket for this week, we have the Federal Reserve decision on Wednesday and Gross Domestic Product figures on Thursday. The headlines over contagion may take over China this week as the focus also falls on the U.S. government’ progress in designing a stimulus package that can pass as soon as possible this week. There is also major Purchasing Managers’ Index data out for China on Friday, which if good could sink the buck to even lower records.

 

What to Watch Today…

  • No major events scheduled today

Complete Economic Calendar can be found here.

 

EUR

The Euro continues its run and is not far from reaching its highest level in over two years after a weekend that established the weakest buck in just as long. Comparative analysis since the pandemic began is the reason why now we face such an expensive Euro since the bloc and the EU as a whole worked in unison and reopened the economy with far less hiccups.

The passing of the rescue package made sure that the continent had something to stabilize the economic reality and the shared currency’s value is now predicted to continue rising as long as other regions keep struggling. We have a slew of data this week that can further confirm the Euro’s high price, now on a six-week consecutive winning run. 

 

GBP

The Pound is trading at its strongest level in two weeks after some doubts over the direction of Brexit started emerging last week. At this moment, EU as well as U.K. negotiators will ready themselves to negotiate further for the week, but experts already sense that there is no trade deal in sight with any difference from what would be set by the World Trade Organization. This week’s flows will be mainly influenced by what Michel Barnier or his British counterpart David Frost can achieve if anything at all.

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