Forex markets trapped on pandemic concerns and economic recovery

Avatar photo

Vrasidas Neofytou
Head of Investment Research

See all articles

Forex Update, Tuesday, 14th of July, 2020


The Forex market has been trapped between the reopening rollbacks in the US and hopes for an economic recovery in other parts of the world.

The safe-haven currencies such as the US dollar, Japanese Yen and Swiss Franc have regained their safety status since the start of the week with the return of risk aversion sentiment. Florida reported daily records in infection cases while California re-imposed lockdown measures to contain the spread of the virus. However, these safety currencies remain near monthly lows against riskier currencies, as the US dollar ended its third week of losses in a row since last Friday. 

Fig.01: DXY-US dollar’s index


The Euro climbed near 1.14 against the US dollar, its 4-month high, gaining support from the dollar’s weakness, the improved macroeconomic activity in the Eurozone and the ongoing fiscal and monetary packages from the European Union. 

Fig.02: EUR/USD pair


The Pound Sterling trades in range as the gains from the stimulus plans were capped from the disappointed UK Gross Domestic Product figures and weaker fundamental data.

Fig.03: GBP/USD pair, 4-hour chart


Moving to Commodity currencies, the Australian and New Zealand dollars trade near yearly highs, benefiting from the rising prices in precious metals, copper, iron ore and other industrial metals. Furthermore, both currencies received support from the weakness in the US dollar and the massive rally in the Chinese stock markets. 

Fig.04: NZD/USD pair, Daily chart

Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Exclusive Capital communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.

Read our detailed Marketing Communication Disclaimer

SHARE

CONNECT WITH OUR TEAM

Explore the ways in which we can help you achieve your investment goals.

OUR PARTNERS
bdo

EXTERNAL AUDITOR

ey

LEGAL ADVISOR

lgt

CUSTODIAN BANK

efg

APPROVED PARTNER

Raiffeisen

DEPOSITORY BANK

Prime Fund

GROUP MEMBER

c