Greenback Begins the Week on a Wrong Footing

20 July 2020 | Updated: 21 December 2020

It was a slow start to the week, with the greenback finishing the day lower versus most major competitors. Market participants have been trapped between the continuing rise in cases of U.S. coronavirus and reports of success in another vaccine. Reports suggested that in a large, early-stage human trial, the Oxford/AstraZeneca coronavirus vaccine induced a powerful immune response. However, the headline was unable to make a sustained advance in high-yielding securities.

The EUR rallied on hopes that EU leaders will reach an agreement on a recovery fund. EU Summit Chairman Charles Michel said the €750B fund may include €390bn in grants, which somehow seems to have persuaded hardliners.

BOE’s Haldane said the UK’s recovery still looks V-shaped, and the economy has squeezed back roughly half of the output it lost in March and April. He also said policymakers might suggest negative rates “if there was another negative shock to the economy.” The GBP/USD pair settled in the 1.2660 price zone at its recent peaks.

Commodities soared with $20 an ounce of silver, its peak since August 2016, while gold fell to $1.817 a troy ounce. Crude oil prices reversed an early fall and put moderate gains to close the day.

Wall Street closed in the green with only marginal improvement with the DJIA and the S&P, but the Nasdaq added 2.51 percent. Next is this week’s attention on earnings reports, with big names announcing results.
Market Reaction
It looks like this EU has no real effect on the common currency ‘s success relative to its biggest competitors. The EUR/USD pair traded at 1,1440 at the time of publishing, adding 0.12 percent daily.

Quoting EU sources, Bloomberg said the EU has offered EUR 750 billion as a pandemic investment fund and EUR 390 billion in grants.

Earlier today, European Council President Charles Michel acknowledged that the talks were very complicated but added that he was confident it was possible to find an agreement.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.