Market Update: The Only Direction For USD Is Going Downward; 3 Central Banks’ Interest Rates Release This Week

(13 July 2020)

The USD index (DXY) experienced a massive drop last week and the bearish trend is expected to be ongoing for the week. This drop in USD pushes other currencies up, especially other safe-haven investments such as JPY and XAU. 

This week there will be more changes in the market with Bank of Japan, Bank of Canada and European Central Bank set to announce their decisions on interest rate changes.

 

USD

After USD’s index (DXY) slumped last week from 97.15 to 96.66, surging virus cases and fatalities had slowed down the dollar’s bearish trends. But it resurfaced again after Trump administration’s recent announcement on economic boosting policies. Sparking hopeful sentiment on stocks recovery and reduced demand for the safe-haven USD; disregarding the record-high virus cases in multiple populous states especially Florida.

This week’s event:

Wed – Crude Oil Inventories

Thu – Initial Jobless Claims, Core
Retail Sales, Philadelphia Fed Manufacturing Index

Fri – Building Permits

 
GBP

For the last two weeks, GBP can be seen recovering from its drop to 1.2314 to the recent 1.2660. However, this rally happens only because of the weakening USD, the UK government itself does not bring substantial change to the currency with no headlines regarding UK-EU trade deals. The market is waiting for further statements from the Bank of England Governor, Bailey plus many other economic data scheduled to release.

This week’s event:

Mon – BoE Governor Bailey Speaks

Tue – Claimant Count Change, GDP, Manufacturing Production
Wed – CPI, BoE Governor  BaileySpeaks

Thu –  Average Earning Index, Claimant Count Change

Fri – Retail Sales, BoE Governor Bailey Speaks

EUR

Euro sees a 4-week high at 1.1370 on 9 July, but quickly reversed down to 1.1254 and bounced up again to close at 1.1297 last week. This week’s Euro is expected to continue on its bullish trend due to the weak USD counterpart and Euro’s role as the most important currency after USD.

This week’s event:

Tue – German Economic Sentiment

Thu – Deposit Facility Rate, ECB
Monetary Policy Statement, ECB Interest Rate Decision

Fri – CPI 

 

AUD

After the bearish closing at 0.6946 last week, the AUD starts strong on Monday morning, recovering grounds and traded at 0.6981. This is due to the growing risk appetite in the market, reflected from the gains in S&P 500 futures. The bullish trend dismissed China-Australia tensions and the worsening coronavirus situation in US and Australia.

 This week’s event:

Tue – Employment Change

The Market Today Morning

USD Dollar Index (DXY) slumped to 96.40 from last week’s highest
of 97.20

USD/CNY dropped to 6.996 from last week’s highest of 7.066

USD/JPY dropped to 106.903 from last week’s lowest of 107.791

EUR/USD rose to 1.1331 from last week’s lowest of 1.1240

AUD/USD rose to 0.6981 from last week’s lowest of 0.6923

GBP/USD recovered to 1.2660 from last week’s lowest of 1.2457

XAU/USD shot to 1807.2 from last week’s lowest of 1770.1

Data from Tradingview.com

Sources:　　

<http://forex.cnfol.com/jingjiyaowen/20200711/28267686.shtml>
<http://forex.cnfol.com/jingjiyaowen/20200713/28268526.shtml>
<http://www.marctomarket.com/2020/07/bearish-case-for-dollar-thickens-but.html>
<http://forex.cnfol.com/jingjiyaowen/20200713/28268220.shtml>