Dollar Weaker; Risk Mixed as COVID Deaths Reach 500K

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Dollar Weaker; Risk Mixed as COVID Deaths Reach 500K

The U.S. dollar was pulled in different directions overnight, first gaining as equities in Asia fell a percent, but quickly reversing those gains as European equities traded higher and American futures swung from negative to positive.

Overview

Overall, the Bloomberg Dollar Spot Index is down a modest 0.1%.

Conflicting headlines are likely the cause of directionless risk sentiment.  Globally, Covid-19 deaths surpassed 500K and the pace of new infections have accelerated in the United States.  But hopes of a vaccine were elevated after news a Chinese firm received approval for military use.

On the economic front, pending home sales and Dallas Fed Manufacturing will be released later this morning.  New York Fed President John Williams will moderate a discussion with IMF Managing Director Kristalina Georgieva this afternoon.  Fed Reserve Chairman Jay Powell and Treasury Secretary Steven Mnuchin testify before the House tomorrow.  The largest risk event on this week’s docket is Non-Farm Payrolls data which will be released on Thursday, a day early because of the Fourth of July.

What to Watch Today…

  • Pending Home Sales at 10 a.m.

Complete Economic Calendar can be found here.

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EUR

The Euro ripped half a percent higher against the greenback to start the week, benefiting from positive economic data.  The European Commission released a survey that showed economic confidence rose in June, albeit by less than forecast.  Otherwise, the economic docket was fairly quiet. The road to recovery will still be a long one for the 19-nation region as most expect the area’s economy to shrink more than 8% this year.

GBP

The British pound yo-yoed between gains and losses against the U.S. dollar overnight and is currently a tenth weaker versus its American rival.  The sterling initially popped higher after British Prime Minister Boris Johnson said the U.K. will spend large chunks of money to boost the economy.  The spending is expected to include new hospitals, schools and infrastructure projects. The U.K. is also expected to sell a record amount of government debt this year.  However, the sterling was unable to hold these short-term gains and collapsed back to levels seen on Friday.

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