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Euro Hits 20-Month High against the US Dollar as US-China Tensions Intensify

Pound News: Sterling Floundering amid Lack of Drive

The Pound was driven more by movement in rivals today, boosted by weakness in the US Dollar amid a lack of solid developments in the UK’s outlook.

Last week’s Brexit jitters keep the Pound under pressure, while Sterling has retained most of its gains from Friday’s stronger-than-expected retail and private sector data, which showed growth.

This week’s most notable UK data will be published tomorrow, July’s CBI distributive trades report that measures the health of the retail sector through sales activity and consumer spending. If the data comes in worse than expected, the Pound is likely to struggle.

 

Euro News: Euro Continues to Surge

Investors continued buying the Euro today, with the Euro still benefiting from the EU’s recovery fund agreed last week. Friday’s strong Eurozone manufacturing and services data showing growth also supported the Euro.

Meanwhile, the Ifo Business Climate Index in Germany released today showed business optimism is strengthening, boosting recovery hopes in the Eurozone’s largest economy.

The next notable Eurozone data will be published later in the week. However, if the Euro’s rivals, the Pound and US Dollar remain weak, the Euro is likely to remain appealing.

 

US Dollar News: Gloomy US Outlook Keeping US Dollar Weak

Markets are increasingly averse to the US Dollar’s usual appeal as a safe haven as the US economic and coronavirus outlooks continue to worsen. Surging coronavirus cases in the US, as well as rising signs of weakness in US data, continue to keep the US Dollar weak.

On top of this, US-China tensions continued rising after China ordered the US to leave its consulate in Chengdu in retaliation to a similar move by the US in Houston.

Notable US data will be published throughout this week. However, tomorrow’s US manufacturing data is unlikely to cause much movement, with the main focus on Wednesday’s Federal Reserve policy decision.

 

Canadian Dollar News: Weak Oil Prices Keeping CAD Under Pressure

Prices of oil, Canada’s most lucrative commodity, are once again weakening today. As US-China trade tensions worsen, trade jitters intensify and oil prices fall, the oil-correlated Canadian Dollar weakened.

Canada’s economic calendar will be fairly quiet until the end of the week. For now, shifts in market risk and trade sentiment are likely to drive Canadian Dollar movement.

 

Australian Dollar News: ‘Aussie’ Holds Ground despite US-China Tensions

The Australian Dollar made gains today due to the weakness in the US Dollar. The ‘Aussie’ also held its ground against Sterling this morning despite fresh US-China trade tensions and rising coronavirus cases in Australia.

The Australian Dollar will be driven largely by coronavirus and risk developments until later in the week, when Australian inflation data is due for publication.

 

Upcoming Data

 

Tuesday, 27th July

11:00    UK CBI Distributive Trades

15:00    US CB Consumer Confidence

15:00    US Richmond Fed Manufacturing Index

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