Forex Today: Dollar dominates, gold shines as coronavirus rages in the US, triple data release eyed
- 25th June 2020
- Posted by: Hakeem
- Category: FOREX LATEST NEWS DAILY
Here is what you need to know on Thursday, June 25:
The market mood is sour as COVID-19 statistics in the American south continue rising at an alarming rate. The dollar and gold are shining stocks and other currencies are down. A triple release of US economic figures and coronavirus data are eyed.
US coronavirus: The number of new cases is accelerating in many other states including Florida, Houston is about to reach full capacity in its hospitals, and Arizona does is unable to keep up with the pace of testing. Moreover, states in the greater New York area want those coming from the infected southern states to quarantine, and even deaths from the disease are on the rise after a constant decline.
Gloomy forecasts: Another factor weighing on stocks is a downgrade of forecasts from the International Monetary Fund, which now projects a downfall of 4.9% in 2020. It also laid out an L-shaped scenario that sees no growth in 2021.
The US dollar is the primary beneficiary, gaining ground against all currencies, including the safe-haven yen. Gold prices are consolidating their gains around $1,770 after hitting new 7.5-year highs on Wednesday. S&P 500 futures and Asian stocks are falling alongside oil and other currencies. David Solomon, Goldman Sachs’ CEO, hinted that stock valuations are too high.
The US calendar is packed with three top events: The final Gross Domestic Product release will likely confirm the 5% annualized contraction in the first quarter. Durable Goods Orders are projected to rebound in May after tumbling in April.
The final economic statistic to watch is weekly Jobless Claims, forecast to resume their slide. Continuing claims are also of importance, as they are for the same week when the Non-Farm Payrolls surveys are held.
See US Initial Jobless Claims: The pandemic still controls risk perception
US elections: Additional opinion polls have confirmed Democrat Joe Biden’s solid lead against President Donald Trump, which is above 9%. Investors fear a clean sweep for Democrats. Elections news is having trouble competing with COVID-19 headlines.
EUR/USD is stabilizing at the lower ground ahead of the European Central Bank’s meeting minutes release for its June meeting when it decided to boost its bond-buying scheme. The level of concern about the economy and explaining that the move was proportional – answering the German constitutional court – are eyed. Various European countries are experiencing local COVID-19 outbreaks, which currently seem under control.
GBP/USD is trading above 1.24 but off the highs. The UK government is struggling with criticism about his handling of the crisis. Brexit may grab the headlines ahead of the resumption of talks on Monday.
WTI oil is trading around $37, at lower ground. an increase in inventories joined the risk-off mood. Commodity currencies are retreating from the highs.
Cryptocurrencies are on the back foot, with Bitcoin hovering around $9,100.