The US dollar lost ground against all major currencies yesterday aside from the Japanese yen. EURUSD advanced to its best levels since October 2018 while the pound managed to stage an intraday recovery to close, once again, above the $1.27 handle.
Regardless of the improving economic data stemming from the US, traders and dealers are still content selling the buck across most of the board. Commodity currencies are on fire at the moment with the Aussie dollar reaching its highest level vs. the greenback in over 15 months. The Kiwi dollar has been an impressively strong performer too.
The euro continued to surge yesterday, hitting new 21 month highs against the buck. This drove GBPEUR down to the low €1.09s as sterling underperformed across the European morning session. However, the pound recovered well as New York participants arrived at their desks, recovering all its intraday losses and managing to close in the green. This solid display of resilience from the pound does bode well, however, one thing many will have learned from the last 4 years is just how good GBP has become at sending mixed messages.
Today’s main economic data point will be US initial jobless claims which are scheduled for the usual time of 13.30. The consensus is for 1,300,000 fresh job losses, an incredibly concerning amount at this stage. Additionally, company earnings will be in focus following Microsoft and Tesla’s impressive reports yesterday evening.
Written by Viv Savani. 9:06am, July 23rd 2020
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