Australian Dollar Under Pressure as Coronavirus Cases Surge

Australian Dollar (AUD) Struggles on Jump in Coronavirus Hospitalisations

The Australian Dollar (AUD) slumped at the end of last week despite markets stabilising.  The ‘Aussie’ remained under pressure after reports revealed an Australian lawmaker has been suspended and his office is facing investigation over alleged links to China.

Added to this, the risk-sensitive AUD struggled after this week’s surge in coronavirus infections and hospitalisations in the United States.

Looking ahead, the Australian Dollar could edge lower at the start of this week if risk appetite slumps as further US states delay reopening due to high numbers of coronavirus cases.

Pound (GBP) Slides as Brexit Fears Dominate

The Pound (GBP) slumped on Friday as trader attention turned back to trade negotiations between the UK and EU.

Markets worried Britain would be unable to secure a trade deal with the European Union as little progress has been made since the country officially left the bloc. So far this month, Sterling has been one of the worst performers amongst major currencies.

With Brexit continuing to be the biggest catalyst for movement of the Pound, trader attention will focus on this week’s latest round of trade talks between London and Brussels.

Euro (EUR) Sets Itself up For Largest Weekly Rise in Three Weeks

The Euro (EUR) jumped at the end of last week’s session, setting itself up for the biggest weekly rise in three weeks.

The European Central Bank (ECB) reaffirmed its dovish stance in its monetary policy meeting minutes. Cautious comments from policymakers suggest the bank may extend its bond purchasing plans at the end of the year which may offer the single currency support.

Looking ahead, the Euro could edge higher today if June’s Eurozone business and final consumer confidence rebounds more than expected in June.

US Dollar (USD) Strengthens on better-than-expected PCE Price Index data

The US Dollar (USD) made gains on Friday as May’s Core PCE Price Index came in better-than-expected in positive territory.

Meanwhile, a slight loss of risk appetite caused by the number of coronavirus infections in the United States supported safe-haven demand for the US Dollar.

Adding to the downbeat market mood, the governor of Texas temporarily stopped the reopening of the economy after seeing one of the largest increases in new coronavirus cases.

Looking ahead, the Dollar could struggle to make gains if US pending home sales data slumps more than expected in May due to the coronavirus pandemic.

Canadian Dollar (CAD) Struggles as Oil Prices Fall

The Canadian Dollar (CAD) struggled at the end of last week as oil priced slipped lower at the end of the week, reversing earlier gains.

Rising coronavirus cases in China and the US, and expectations US oil output would continue to increase as crude stockpiles remain at record highs weighed on the oil-sensitive ‘Loonie’.

Looking ahead, CAD could slide if May’s Producer Price Index (PPI) slides further than expected and oil prices continue to edge lower.

New Zealand Dollar (NZD) Jumps as Stocks Bounce Back

The New Zealand Dollar (NZD) was able to rise at the end of the week as traders focused on the reopening of economies rather than the growing number of coronavirus cases reported around the world, with the ‘Kiwi’ was able to benefit thanks to the bounce back in stocks.

Looking ahead, the ‘Kiwi’ could reverse last week’s gains if risk appetite plummets once again.

 

Upcoming Data

29th June 20:00                  EUR                        Business Confidence (June)                         -2

29th June 20:00                  EUR                        Consumer Confidence (June)                      -14.7

29th June 20:00                  EUR                        Economic Sentiment (June)                         79.1

29th June 23:00                  EUR                        German Inflation Rate (June)                      0.5%

30th June 01:00                  USD                       Pending Home Sales (May)                          -16.2%

Louisa Heath

louisa.heath@torfx.com


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