The OPEC meeting and the US Nonfarm Payrolls rocked the market last week. The market is torn between optimism about the global economic recovery and concerns about the new coronavirus strains.
Common currency stands still on improved economic views
On Thursday, the common currency stood still after evidence of strength in the Chinese economy improved the outlook for the world economy, with the financial markets looking next to EU gauges to provide the euro with a further boost.
As a matter of fact, the common currency was nearly intact, sticking with $1.1293.
The common currency has steadily revived from a minimum of $1.1183 recorded at the beginning of April.
The common currency managed to rally once Wednesday’s data revealed that the Chinese economy headed north at a steady 6.4% tempo in the first quarter, thus confounding expectations for a further deceleration, as industrial output rallied and consumer demand demonstrated signs of improvement.
Some experts are assured that a recovering Chinese economy backs the German economy and in turn – the common currency.
Moreover, the everlasting ascend in bund gains amid 'risk on' appears to be a major factor backing the common currency.
Eventually, the 10-year German bund yield tacked on to a one-month peak of 0.10% overnight, in a steep rebound from a 2-1/2-year minimum of minus 0.094% at the end of the previous month.
In March, bund gains had gone down because fears about decelerating global surge gripped the broader market. Traders are currently watching European and Chinese economic data for clues that the world economy is performing better than initially anticipated.
Versus a group of six key counterparts, the USD index was intact, demonstrating an outcome of 97.051 having slumped by 0.05% yesterday.
The evergreen buck dived by 0.1% hitting 111.955 yen having hit a four-month maximum of 112.17 on Wednesday against the backdrop of a bounce in American Treasury gains to a one-month maximum.
As for the Canadian dollar, it was worth C$1.3351, having rebounded from a one-month maximum of C$1.3275 recorded on Wednesday.
The Reserve Bank of Australia (RBA) will hold a meeting and announce changes to the monetary policy on August 3, at 07:30 MT time (GMT+3).
What events to follow and how to trade during the week of July 2-6?
EUR/USD retraced to 1.1870 after breaking out this level. It should be just a natural sell-off ahead of the further rally up.