US dollar hits 18 month low as Gold soars
The dollar drops to January 2019 levels and is on track for the worse month in a decade as high rates of COVID infections dampen economic recovery. Investors have sold the US dollar in favor of currencies where the pandemic has been more contained.
Monday: GE IFO Business Climate, US Durable Goods
Wednesday: MBA Mortgage Applications, FOMC rate decision
Thursday: US Jobless Claims, Japan Industrial Production
July 27, 2020
EUR/USD 1.1741 GBP/USD 1.2853 USD/CAD 1.3394 AUD/USD 0.7133 USD/JPY 105.40 USD/CNH 7.00 USD/ILS 3.42 USD/MXN 22.11 USD/CHF 0.9225 USD/INR 74.84
The greenback hit an 18-month low falling 0.9% to its lowest level since January of 2019 ahead of the Federal Reserve policy meeting. Today, Senate Majority leader Mitch McConnel is expected to unveil the Republican stimulus plan containing $1T in support for the US economy. The plan aims are to extend unemployment benefits, another round of stimulus checks and increased funds for schools and testing.GBP
The pound is benefiting from US dollar weakness and is up half a percent versus the greenback to start the week. Pound bulls shrug off fears of a stalemate between the UK and EU and a no-deal before the PM’s July deadline.EUR
The euro climbed for a seventh session straight to the 1.1764 level breaching a 6-year descending trendline. The Sept 2018 1.1815 level is the next technical target.CAD
The Canadian dollar is also up versus its US counterpart on broad US dollar selling and an uptick in gold and oil prices.ASIA/PACIFIC
USDJPY fell 0.8% to 105.25 as stops and barriers were triggered.
The onshore yuan gained for the first time in four days as the dollar dropped. Trade tensions between the US and China flared again as the US consulate in Chengdu shut down in compliance with a retaliatory measure after Washington closed the Chinese consulate in Houston.
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