As it has been the case all week, US Dollar weakness is stimulating price movement. The dollar has continued to struggle, with the index down 0.25% yesterday and down 0.4% this morning coming into the session. This comes at a time when the US labour market is showing signs of softening – Initial Jobless claims posted its second straight week-on-week rise yesterday, and Continuous claims has risen for the first time since March. The US Q2 GDP report was also released yesterday, showing a record decline of 32.9%. This has renewed doubts in the US economic recovery and prompted some aggressive selling of the USD going towards the close of the session.
In reaction to dismal news coming out of the US and the vicious sell off – GBP and EUR continued to make the best of the dollar’s bad situation. GBPUSD is currently trading at 1.3132 (08:06 GMT), up 0.27% on a day. Equally the EUR has gained ground early on the dollar, up 0.41% on the day. Last night at 03:44 GMT, from the momentum prolonged through to the Asian session, EURUSD was able to briefly test the 1.19 handle for the first time since May 2018.
On Thursday, EURUSD started the session at 1.1755, only to finish the day at 1.1792.
Yet another positive day for cable with GBPUSD opening at 1.2958, to only press beyond 1.30 during the session, closing the trading day at 1.3035.
Again, it was a less eventful for GBPEUR – the pair opened at 1.1023, and with little action over the day, closed at 1.1054.
As COVID-19 continues to dictate the world economy, experts fear that cases may be on the rise. Both Italy and the UK posted their highest daily virus cases since June yesterday. Justin Trudeau, the Canadian Prime Minister, warned Canadians of a second wave and Australia recorded their big daily increase in both cases and deaths.
On the data front it is a busy morning for the Eurozone with Q2 GDP and Core Inflation Rate for July at 10:00. GDP is expected to fall to 12%, which would be another record figure. From the US, in the afternoon we have Core PCE Price Index for June and the Michigan Consumer Sentiment for July.
