Forex Today: Gold eyeing $1,800, dollar mixed, as coronavirus, Hong Kong peg move markets
- 8th July 2020
- Posted by: Hakeem
- Category: FOREX LATEST NEWS DAILY, FOREX MARKET ANALYSIS
Here is what you need to know on Wednesday, July 8:
Markets are looking for a new direction after stocks retreated and the dollar gained some ground on Tuesday. Concerns about coronavirus cases in the US and geopolitical tensions are in play.
US coronavirus: After dipping in Monday’s reports, US COVID-19 cases advanced once again in figures released on Tuesday. Infections in California and Texas surpassed the 10,000 marks each and Florida’s positive test rate jumped to 16%. Washington will officially leave the World Health Organization in 2021.
Gold remains close to $1,800 after hitting $1,797 on Tuesday, the highest since 2012. Exchange-Traded Funds backed by the precious metal report their seventh consecutive month of positive inflows, adding $40 billion in June or104 tons of gold.
Hong Kong: Reports suggest that advisers to President Donald Trump touted the idea to break the Hong Kong Dollar peg to punish China. Around $5 trillion are deposited in the city-state and China’s central bank backs the HK one.
Traders are shrugging off the idea and USD/HKD remains close to the lower end of the range, showing the HKD remains strong. China recently tightened its grip on the financial hub and opened a national security agency there.
UK Chancellor of the Exchequer Rishi Sunak will unveil a stimulus plan later in the day, and some suspect it will fall short of facing the magnitude of the crisis. GBP/USD stood out on Tuesday by recovering its previous losses.
Brexit: UK PM Boris Johnson has told German Chancellor Angela Merkel that Britain is ready to end the transition period without a deal. Both sides remain at odds over trade, regulation, and also fisheries. The call between the leaders came as top negotiations met for dinner in London and reportedly had fish as the main dish.
AUD/USD remains pressured around 0.6950 as Melbourne is in lockdown and daily COVID-19 cases top 100, including in the capital Canberra. Australia has warned its citizens that they may face “arbitrary detention” if they go to China. Strained Sino-Australian relations are also weighing on the Aussie.
USD/JPY is stable around 107.50 as coronavirus cases remain stubbornly high in Tokyo. However, most patients are young and hospitals are coping.
WTI Crude Oil is hugging the $40 level ahead of crude oil inventory figures due out later on Wednesday. USD/CAD has stabilized around 1.36.
Cryptocurrencies are edging up, with Bitcoin trading closer to $9,300.
The economic calendar features speeches from European Central Bank officials US consumer credit. The US JOLTs job opening surprised by standing above five million in May. Weekly jobless claims are awaited on Thursday.