The EUR made a significant rise on the news of the stimulus expansion. Will it last long?
UK pound is fragile on concerns over no-deal Brexit
On Tuesday, the major UK currency was fragile having dived to an 11-month minimum versus the evergreen buck overnight on worries over a tough Brexit from the EU, while escalating US-China trade clashes backed the evergreen buck.
Remarks from statesmen regarding a no-deal Brexit generated worries that the United Kingdom would crash out of the European block in 2019 without securing a trade pact.
The UK pound edged down to $1.2920 overnight, which is its lowest outcome since early September.
As for the evergreen buck, it was firm enough. The USD index was intact sticking with 95.345. Yesterday, it approached the more-than-one-year maximum of 95.652 recorded on July 19.
It’s believed that trade clashes back the US currency due to the fact that the American economy is better suited to handle protectionism compared to emerging markets. Secondly, duties might narrow the American trade deficit.
On the other hand, other economists think that if American economic surge starts to decelerating due to duties or because past tax-cut effects are receding, then most probably the US economic performance could weaken that in turn could suppress the evergreen buck.
Meanwhile, the common currency was still weak having dived to a five-week minimum of $1.1530 overnight due to the fact that German industrial orders headed south more than anticipated in June, reporting their steepest monthly sag for a year.
The Japanese yen managed to soar a bit versus the evergreen buck hitting 111.32 yen ahead of Thursday's highly anticipated bilateral trade negotiations between Japan and America in Washington.
As for the offshore Yuan, it was seen at 6.8625 yuan per greenback.
In addition to this, the Turkish lira strengthened versus the evergreen buck. By the way, the currency showed 5.2750 versus the evergreen buck on Tuesday.
April seasonal patterns weren’t supposed to work, but somehow they did. Even a strong fundamental issue such as the global recession amid the coronavirus couldn’t overwhelm it. That’s why May seasonal patterns may work as well.
The first days of May suggest the month will be risk-off for the GBP/USD. Here is why.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
The risk-on tone is back on the market again. Let’s look at main trading opportunities.