Safe haven assets remain attractive as markets trade risk-off
Renewed tensions between the US and China along with remaining concerns over the coronavirus caused risk sentiment to take a hit. News that Trump’s administration rejected China’s expansive maritime claims in the South China Sea escalated tensions with Beijing. This decision reversed previous policy where the US would not take sides.
July 14, 2020
EUR/USD 1.1365 GBP/USD 1.2487 USD/CAD 1.3632 AUD/USD 0.6939 USD/JPY 107.3700 USD/CNH 7.0217 USD/ILS 3.4433 USD/MXN 22.7566 USD/CHF 0.9401 USD/INR 75.4275
USDRisk-off sentiment has supported the USD against its peers. The US release of consumer price data showed a jump of 0.6% from the prior month, the first increase since February.GBPThe British pound dropped below 1.26 after data from the UK showed that the economy expanded much slower than expected during the month of May. Sterling hit a low of 1.2507.EUREUR/USD extends its winning streak as the currency pair trades above 1.1350 hitting a high of 1.1381. Ahead of the EU summit, German Chancellor Angela Merkel and Italy’s Giuseppe Conte stated that EU leaders must deliver a “massive” response to the economic fallout of the pandemic.CAD
The Canadian dollar fell lower along with weaker oil prices. The commodity’s price traded lower as investors anticipate the continued threat of the virus will limit demand in some economies. USD/CAD is currently trading above the 1.36 handle.ASIA/PACIFICMarkets continue to trade with risk-off sentiment following news from the World Health Organization which warned that Covid-19 probably will not disappear for the foreseeable future. USD/JPY remains largely unchanged trading around 107.35.
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