After taking a hit on Friday, the US Dollar has been unable to recover from its disappointment going into the new trading week. The Dollar slumped after the Michigan Consumer Sentiment wildly missed expectations for August, coming in at 70.2, despite being forecasted at 81.2. The US Dollar Index (DXY) was 0.4% lower on the day at 92.523, its lowest since 6th August. As the Dollar picks up this morning, looking ahead to this week investors will be focusing on US Retail Sales on Tuesday and the latest FOMC Minutes on Wednesday. Retail Sales for July are expected at -0.3% and “economists are forecasting a drag from weaker auto sales, caused in part by supply-chain issues that have limited dealer inventories”. Dollar bulls are hopeful that these data releases can turn around the Greenbacks recent misfortunes. However, if the data is not as expected and misses forecasts, it could further bolster “the case for action from the Federal Reserve”.
The Pound made advances against a weaker Dollar on Friday but showed a loss against the Euro. The UK Government recorded 29,520 new COVID-19 infections on Saturday, followed by 26,750 new cases yesterday. The data suggests however that at least 47,302,445 Brits have had at least one dose of the vaccine, and 76.7% of all British adults are double jabbed. Sterling bulls can be hopeful as leading UK scientists on Friday said they expect COVID-19 deaths and hospital admissions to fall for the rest of August, despite the reopening of the economy at the end of July.
GBPUSD was able to gain some upside on Friday as weak data crippled the US Dollar. Cable opened the day at 1.3808 and was able to close the week trading above the 1.3850 mark at 1.3852.
GBPEUR in contrast made a loss on Friday. The pair opened at 1.1765 and closed at 1.1748.
Similarly to Cable, EURUSD also capitalized on a weaker USD. The pair started the session at 1.1736 and went on to close at 1.1791.