Upbeat US labor data leading stocks higher, dollar softer
Better-than-expected labor data released this morning is pushing US equities higher and the dollar lower. Strong investor demand pushed both Chinese equities and the Chinese yuan higher, which broke back below 7 for the first time since early March. Improved German trade figures indicate an economy in recovery. The dollar is soft and US Treasury yields are lower. Oil is steady around $41 a barrel and gold remains above $1,800 per ounce.
“We must accept finite disappointment, but we must never lose infinite hope.”
July 9, 2020
EUR/USD 1.1326 GBP/USD 1.2658 USD/CAD 1.3507 AUD/USD 0.6986 USD/JPY 107.1200 USD/CNH 6.9875 USD/ILS 3.4383 USD/MXN 22.6020 USD/CHF 0.9383 USD/INR 74.9950
The US dollar was broadly lower overnight. This morning’s upbeat labor data had little impact despite US equities gaining on the news. Investors continue to move into Chinese equities and the Chinese yuan. Foreign equities were mostly in the green, indicating a modest risk-on mood in the markets. Presidential hopeful Joe Biden will unveil his plans for the economy today, which may include $700 billion in spending on American products and research, a challenge to Trump’s “America First” agenda.GBP
The UK pound is higher amid general dollar weakness and positive follow-through from yesterday when the Chancellor of the Exchequer presented an upbeat economic plan for a UK recovery.EUR
The euro jumped over $1.13 in overnight trading following news that Germany’s trade surplus grew in May, as exports expanded more strongly than imports. Technical currency traders are closely watching the euro’s upward momentum, as it advances within a third monthly increase and approaches its 200-week average for the first time in a year.CAD
The Canadian dollar is steady and hovering near 1.35. Traders are showing increased concern over PM Justin Trudeau’s fiscal spending plan which will result in a budget deficit equal to 16% of Canada’s GDP this year.ASIA/PACIFIC
The USD/CNY broke back below the key 7 level for the first time since March. The CNY has strengthened for the fourth straight day, the longest run since early June. Chinese and other Asian stocks gained as investors see China’s policy support continuing and less stress in US-China trade talks.
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