Dollar ends lower on rally in euro and sterling

Market Review - 20/07/2020  23:48GMT  

Dollar ends lower on rally in euro and sterling

The greenback pared intra-day losses after falling to a near six-week low on short-covering and ended lower against majority of its peers on Monday, except for safe-haven Japanese yen and Swiss Franc led by rally in sterling and euro. The single currency gained to a fresh 4-month high on optimism that EU leaders will agree on the recovery fund after extending negotiations to the fourth day.  
  
Versus the Japanese yen, although dollar opened higher to 107.16 in New Zealand, price retreated to 107.02. However, the pair then jumped to +an 11-day high of 107.53 at Asian open on cross-selling in jpy but later weakened to 107.04 in New York morning on fall in U.S. Treasury yields and then moved broadly sideways.  
  
The single currency went through a volatile session. Although price rose from 1.1405 to 1.1445 in New Zealand, then to a fresh 4-month high at 1.1467 in European morning on optimism that European Union leaders would agree on the compromised recovery fund as summit has been extended to the fourth day, the pair then fell to session lows of 1.1403 in New York morning on profit-taking but later rebounded again to 1.1448 before stabilising.  
  
Reuters reported signs emerged that leaders of northern European Union countries were willing to compromise on a 1.8 trillion euro ($2 trillion) coronavirus stimulus plan on Monday as talks in Brussels extended to a fourth day.     Divided and slow to respond at the start of the coronavirus outbreak in Europe, EU leaders believe they now have a chance to redeem themselves with an aid plan that would show Europeans the bloc can react to a crisis.   Also, EU Council President Charles Michel said on Monday he was convinced EU leaders, meeting for the fourth day, would reach an agreement on an economic recovery package to deal with the COVID-19 pandemic.   
  
Although the British pound recovered to 1.2574 in New Zealand, price fell to session lows at 1.2519 in Asia. However, cable then erased intra-day losses and later rallied to session highs at 1.2665 in New York morning due partly to active cross-buying in sterling especially vs euro.  
  
In other news, Reuters reported AstraZeneca's experimental COVID-19 vaccine was safe and produced an immune response in early-stage clinical trials in healthy volunteers, data showed on Monday.    The vaccine, called AZD1222 and under development by AstraZeneca and scientists at Britain's Oxford University, did not prompt any serious side effects and elicited antibody and T-cell immune responses, according to trial results published in The Lancet medical journal.   
  
Data to be released on Tuesday :  
  
Japan national core CPI, national CPI, UK PSNB, PSNCR, Swiss trade balance, exports, imports, U.S. national activity index, redbook, Canad new housing price index, retail sales, retail sales ex-autos, and New Zealand GDT price index.