Forex Today: Dollar sold-off on EU recovery fund, coronavirus headlines – FXStreet

Here is what you need to know on Wednesday, July 22:

Dollar’s sell-off was the main theme this Tuesday, as the American currency plunged against all of its major rivals. There was no specific catalyst for the slide, but a combination of optimistic news and technical breakouts.

The EUR/USD pair surged to 1.1539, underpinned by news showing that EU leaders finally agreed on a coronavirus recovery fund of €750 billion, which will include €390 billion in grants.

The US Senate started discussing a new recovery package. Senator McConnell said that the new coronavirus bill would require partisan discussions

GBP/USD surged on broad dollar’s weakness, and in spite of tensions in the UK, the latest with China.  Foreign Secretary Raab announced the UK would suspend the extradition treaty with Hong Kong, as a consequence of the national security law recently imposed. The news came after the UK decided last week to strip the Chinese firm Huawei of any role in the UK’s 5G network from 2027 onwards amid security concerns.

US Secretary of State Mike Pompeo visited the UK to meet with PM Johnson and Raab, to discuss a trade deal between the two economies. Pompeo said that he hopes an agreement can be done “as soon as possible.”

USD/JPY fell to the lower end of its monthly range, bouncing just modestly from the 106.60 price zone.

Commodity-linked currencies were the best performers, amid resurgent oil and gold prices. USD/CAD fell to 1.3424 its lowest since early June as Canadian Retail Sales were up by 18.7% in May. The AUD/USD pair, on the other hand, hit 0.7146 its highest in over a year.

Coronavirus: new daily cases in the US are at around 60,000 a day, still high, but off records seen a couple of weeks ago. Outbreaks are being reported worldwide, although Latin America and Africa are now the epicenters.  China reported that its CanSino potential vaccine had shown promising results in early stages of testing, now moving into phase three. Same happened with a Covid-19 vaccine developed by the Russian Military with the Defense Ministry. There are now four vaccines entering phase three tests.

 US Treasury yields edged marginally lower daily basis, with the yield on the benchmark 10-year note ending the day at 0.60%.

European indexes closed in the green, although off daily highs. Wall Street ended the day mixed, with the Nasdaq lagging and finishing in the red, down by 0.81%.

Crude oil prices surged to fresh 4-month highs, with WTI ending the day at $41.80 a barrel, after reaching $42.50 a barrel earlier in the day. The OPEC+ agreed on a new deal to  remove almost 10 million barrels a day from the market.

Gold surged to its highest since September 2011, printing $1,843.46 a troy ounce, ending the day a couple of bucks below the level. Investors cheered once again easy money, this time coming from the EU.

Cryptocurrency Market News: Europe’s €750 billion stimulus is helping Bitcoin and others  

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