Dollar on backfoot to end lower for a third week
The dollar is set to end lower for a third straight week. Gold and equities were both slightly higher with the dollar is on its backfoot against the Swiss franc and the euro, and holding steady versus the yen and the pound. Housing starts for June are scheduled to be released this morning.
July 17, 2020
EUR/USD 1.1428 GBP/USD 1.2529 USD/CAD 1.3578 AUD/USD 0.6979 USD/JPY 107.20 USD/CNH 6.9966 USD/ILS 3.4380 USD/MXN 22.4837 USD/CHF 0.9398 USD/INR 75.0238
A one-week low in 10-year Treasury yields weighs on the dollar as the American currency heads for its third week of declines. With previous stimulus measures set to run out in a few weeks, there is a race to approve an additional stimulus package. The need for additional stimulus remains clear, with economic data showing that consumers are not returning to pre-lockdown spending as lockdowns are eased.GBP
The pound is lagging slightly behind the dollar. PM Boris Johnson is expected to announce more than £3bn of extra funding for the NHS to help prepare for a second wave of coronavirus. The prime minister is also expected to announce an increase of antigen testing to 500,000 per day by the end of October.EURThe euro firmed versus the dollar and is up 0.4%. The advance held despite German Chancellor Merkel’s doubts that the EU can reach a recovery fund deal this weekend. The proposed deal is EUR 500Bn of EU issued debt given in grants and then an additional EUR 250B in loans.CAD
The Canadian dollar held virtually even versus the dollar ahead of Canada’s wholesale trades report. The US/Canadian pair is set to end the week at a weekly decline of 0.1%.ASIA/PACIFIC
The yen advanced versus the dollar after failing to break through its 55-day moving average of 107.40. The offshore yuan is set to rise for a third week, its longest run in six months as data shows China’s economy rebounding.
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