Forex Update, Tuesday, 7th of July, 2020
The forex market has been focused on the recovery expectations this week, as investors remain optimistic about the growing likelihood that the major economies will continue to recover despite the record spike in virus cases around the world.
The safe-haven currencies, US dollar, Japanese Yen, and Swiss Franc have suffered some losses as investors ignore the pandemic fear, rotating into riskier currencies. The DXY -dollar’s index dropped below the 97 levels, at two weeks low against major currencies after the better-than-expected U.S. services activity, which highlights the economic recovery from the pandemic.
The Australian and New Zealand dollars continued their uptrend momentum, gaining support from the bullish sentiment in China due to their strong economic ties and the rise in commodities prices, especially the recent rally in the prices of copper.
The Euro climbed above 1.13 against the US dollar, supported by the improved German industrial production and Eurozone’s retails sales figures in May. Both indicators have recovered strongly from large declines caused by the spread of the coronavirus.
Looking at Asia, the Chinese Yuan climbed to 4-month highs against the US dollar, following the massive rally in Chinese shares, in response to the growing expectations of a strong Chinese economic rebound.
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