Australian Dollar (AUD) Flat as Surge in Coronavirus Cases Spooks Investors
The Australian Dollar (AUD) remained muted against a handful of currencies on Friday as the risk-off mood continued to send traders flocking back to safety.
Markets were spooked after the United States reported more than 60,000 new coronavirus cases, the largest jump in a single day. The lockdown in Melbourne as well as spikes in other major cities in Asia weighed on risk appetite.
Looking ahead, if the risk-off mood continues during today’s session, the ‘Aussie’ will struggle to claw back last week’s losses.
Pound (GBP) Under Pressure After Moody’s Forecast
The Pound (GBP) struggled to make significant gains at the end of last week after Moody’s said the country would suffer the sharpest economic slump of any major economy.
While the government’s new stimulus package is expected to help the gradual economic recovery, Moody’s said this will add further pressure to Britain’s fiscal position.
Today is quiet in terms of economic data releases, meaning traders are likely to focus on trade negotiations between the UK and European Union. Any positive developments will buoy Sterling.
Euro (EUR) Edges Up as Italy’s Industrial Production Posts Best Month Ever
The Euro (EUR) edged higher against riskier assets but struggled against safer bets as risk appetite slumped.
Data on Friday morning showed Italy saw a strong rebound in industrial production in May. Industrial production jumped by 42.1%, the highest monthly increase on record, although this followed a negative record as production plummeted by -50% in February and April.
Today is quiet for the Eurozone, so it is likely traders will be focused on broader market sentiment. If the risk-off mood continues it will allow the single currency to make gains against riskier assets.
US Dollar (USD) Pauses as America Sees Largest Increase in Covid-19 Cases
The US Dollar (USD) paused during Friday’s session as the rising number of coronavirus cases supported other safe-haven assets such as the Japanese Yen.
American consumers were discouraged from returning to public spaces after the country reported the single largest tally from any country during the pandemic so far. Friday also saw US producer prices slump by -0.2% in June, which weighed on USD.
Meanwhile, the Dollar could suffer losses during today’s session if the latest US Monthly Budget Statement disappoints investors.
Canadian Dollar (CAD) Flat as Canada’s Unemployment Rate Drops
The Canadian Dollar (CAD) remained muted at the end of the week after data revealed Canada’s jobless rate improved to 12.3% in June as 952,900 jobs were added to the economy.
The service sector posted the majority of these jobs, with 794,400 positions gained.
Looking ahead, oil prices could send the ‘Loonie’ lower today if increased concerns about the rising number of coronavirus cases in the United States dampens prices.
New Zealand Dollar (NZD) Muted as Safe-Haven Demand Dominates
The New Zealand Dollar (NZD) remained largely flat at the end of the week as traders flocked away from riskier assets in favour of typical safe-havens.
However, the currency could edge higher today following the release of June’s upbeat food inflation data.
Upcoming Data
13 July 8:45 NZD Food Inflation (June) 3.1%
14 July 04:00 USD Monthly Budget Statement (June) $-975B