Dollar Continues Decline Over Politics
The US index fell to its lowest level since May 2018 as it slid towards 92 on Tuesday.
Meanwhile, the US President is under increased pressure as the Democratic National Conventions are in full swing. Peers are highlighting that the pandemic should have been acted upon much more responsibly by the Trump administration.
In addition, the failure to produce progressive fiscal stimulus talks and the threat to undermine the credibility of the election are taking their toll on the dollar. This is regardless of Nancy Pelosi agreeing to meet Trump halfway with the fiscal package.
The greenback fell against a basket of main currency pairs. USDJPY declined for the third day in a row closing 0.54% lower, near 105.
Investors have stated that the move for the yen is not just about risk appetite but, in fact. the general weakness in the dollar across the board.
Euro Hits 2-Year High
The euro was up against the dollar for a fifth consecutive day as it closed 0.52% higher yesterday.
Weakness against the greenback with one of its main competitors resumed as the EURUSD pair held steady above 1.19, with 1.20 being the next target.
With European government debt likely to remain supported on the EU’s recovery package, a safe-haven rival could be in its infancy.
Europe’s handling of the pandemic recovery seems to be providing a backbone for the euro area’s credit market.
EU/UK Talks Begin with Brussels Rejection
The pound pushed through the psychological 1.32 barrier as it closed over 1% higher on a weak dollar.
The first round of Brexit talks ended yesterday with Brussels denying the UK’s demand for unlimited British haulage access around the EU. Talks continue today with fishing and transportation rights at the top of the agenda.
Record Highs for S&P
US indices continue to soar as the S&P500 closed at record highs on Tuesday.
Amazon once again jumped 4% helping the Nasdaq move higher by 0.7%.
The indices have been climbing higher on a combination of fiscal and monetary stimulus in response to the pandemic, as well as hopes for a swift economic rebound. Yesterday’s strong housing data supported sentiment.
Safe-Havens Gather Momentum
Gold maintained its bullish momentum as it closed 0.88% higher yesterday.
Lengthy US stimulus talks coupled with a recent flare-up with US-Sino tensions led investors to continue the rally with the safe-haven asset. The latest move saw sanctions against Huawei and a potential delisting of Chinese stock holdings.
A review of the phase-one US-China trade deal is in limbo with President Trump stating he personally called off the talks with China over the weekend.
Are we waiting on further fresh highs for the yellow metal?
WTI Awaits OPEC+
Oil prices closed indecisively on Tuesday as the API reported a near-identical crude draw of the previous week’s figure. All eyes will shift to the EIA report today to see if the crude demand will also remain at the previous week’s figures.
The consolidation comes as the OPEC meeting takes place today. More indications will become clear if the asset can break through $43.