Greenback Strengthens as World Slowly Heals
JULY 08, 2021
The U.S. Dollar is trading in mostly stronger ranges as global markets seem convinced that the recovery is overall not a very strong one and that central banks will leave their loose policy in place for the rest of the year.
Fed Minutes yesterday revealed that officials cannot agree on a timeline for tapering because of the ongoing uncertainty in every sector of the economy, particularly labor, which still saw higher than expected Initial Jobless Claims for July as well as Continuing Claims. It is clearly not a time to say the economy is hot and equity participants are starting to wonder if the economy is just losing steam as flare-ups of a new coronavirus threaten to maintain high levels of mortality as well as safety measures, as well as closings, in place.
We will see what headlines come up today as the risk-off sentiment grips the markets. Tomorrow, we will see what is discussed at the start of a meeting between G-20 finance ministers, a glance about Chinese at inflation in China with PPI and CPI, and await a slew of data on our side next week.
What to Watch Today…
- No major economic events scheduled for today
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The Swiss Franc is at its strongest level since mid-June following a return to fear across global markets. A lot more headlines regarding the global pain with new COVID variants and the ongoing death toll in high-density nations are certainly worrying more than just the banks. The uneven nature of the recovery is finally creating a sense of doubt about how sustainable these record valuations in markets can last. We are in the midst of a lot of uncertainty and this narrative in a quiet Thursday may shift if oil markets and other items find some resolution that is more trade-friendly.
The Australian Dollar lost value naturally as trouble slams the recovery from all sides with issues brewing all over the place. While China’s activity remains somewhat steady, the rest of Asia seems in shock with the ongoing medical crisis as the global death toll reached 4MM. The Antipodean currency is now at its weakest point since December.