Daily Update - 15th July 2020
The euro rose to a four-month high against the dollar on Wednesday on hopes European Union leaders may agree on stimulus and deepening fiscal integration to shield the economy from the pandemic The spread of the virus across major European countries is more contained even after recent lockdown measures were lifted, while in the U.S., some states are rolling back reopening measures. The dollar was on the defensive, particularly against other growth-leveraged currencies such as the Australian dollar, following an uptick in U.S. inflation and news of progress in vaccine development. Sterling, however, underperformed after data showed Britain's economy was recovering more slowly than forecast. The euro has been helped by hopes the European Union could agree at its summit later this week on a rescue financing package that will limit the economic damage to the bloc from the coronavirus pandemic. The euro's strength helped to push the dollar index to 96.056, one-month low. Oil prices rose slightly on Tuesday as OPEC and its allies cut production by more than agreed to in June, although demand concerns lingered due to increased cases of COVID-19 in the United States. It’s a quieter day ahead on the Eurozone economic calendar. Key stats are limited to finalized June inflation figures from Italy. We don’t expect the stats to move the dial, leaving the European majors in the hands of COVID-19 and geopolitics early on. The reintroduction of lockdown measures is bad news for the U.S and global economic recovery. We have yet to see any major spikes in the Euro area, however, to lead to new measures in key member states. Riskier assets got a boost ahead of the European open, with progress towards a COVID-19 vaccine delivering support. From the U.S, it’s also a relatively quiet day on the economic calendar. Industrial production figures for June and NY State’s manufacturing index figures will provide direction late in the day.Yesterday's Market
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