Forex Today: Markets attempt to shrug off grim coronavirus developments
Here is what you need to know on Monday, June 29:
Markets are attempting to shrug off growing concerns about the spread of coronavirus, especially in the US. Robust Chinese industrial profits and hopes for a vaccine are providing some balance. Several economic figures are due out at the beginning of a busy week.
Global coronavirus cases have reached ten million and deaths passed the grim 500,000 level. Investors are concerned about the surge in the US, including a leap in Texas' positive test rate, hitting 14.3%, record highs in Arizona and Georgia, new restrictions in California, and more. Vice President Mike Pence said that wearing a mask is "just a good idea" in a shift from the White House.
China: a new cluster has been reported close to Beijing after another outbreak in the capital earlier this month. Authorities were quick to lock down the region. On the other hand, the world's second-largest economy is advancing with a vaccine candidate called Ad5-nCoV, encouraging news. Moreover, industrial profits are up 6% YoY in May, the first monthly increase since the crisis.
EUR/USD is edging up ahead of preliminary inflation figures from the eurozone for June. Consumer prices have likely remained depressed. Isabel Schnabel of the European Central Bank said that inflation could dip below 0%.
French President Emmanuel Macron suffered a defeat in local elections, somewhat weakening his position as negotiations about the EU Fund continue.
GBP/USD is attempting to move toward 1.24 ahead of Prime Minister Boris Johnson's speech on the economy this week. The government is set to present a large spending program, and that is supporting sterling.
Brexit talks resume on Monday in the new "intensive phase" after four inconclusive rounds about future EU-UK relations. Andrew Bailey, Governor of the Bank of England, will speak later in the day.
AUD/USD is still trading below 0.69 amid a resurgence in cases in Victoria state, the most populous and the one that slapped the harshest lockdown. NZD/USD is above 0.64 as Prime Minister Jacinda Ardern poured cold water on hopes of opening borders.
USD/JPY is trading around 107, as Tokyo reported 60 cases, the highest in over a month, and as the transmission could not be determined.
Gold is holding onto the high ground around 1,770. WTI Oll is retreating from its previous gains and trades around $37.
Cryptocurrencies are relatively stable after edging lower beforehand, with Bitcoin hovering around $9,100.
US Pending Home Sales for May are forecast to show a substantial rebound after falling by 21.8% in 18.9%. In politics, challenger Joe Biden is holding onto a nine-point lead over incumbent President Donald Trump. Markets are currently focused on other topics but may tune in.
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