Cautious optimism emerged as the underlying theme so far today, as the US dollar traded broadly subdued, with the bounce capped by the optimism over the global economic recovery. Upbeat Euro area Preliminary PMIs bolstered the narrative of a quicker economic rebound that triggered the Wall Street rally and downed the greenback.
On the forex front, most majors held onto thin trading ranges after a volatile session on Tuesday. USD/JPY consolidated the bounce from seven-week lows of 106.08, underpinned by the rebound in US Treasury yields. EUR/USD stuck to modest gains above 1.1300 ahead of the German IFO Survey. GBP/USD held steady above 1.2500, as optimism over the UK economic re-opening faded.
Gold prices gathered pace to retest seven-year highs of $1,773.57, but later retreated below $1,770. WTI was on the defensive above $40 mark amid a build in the API crude stocks.
Looking forward, the German IFO data for June, scheduled for release on Wednesday at 08:00 GMT will hog the limelight for the day. The focus would be on the forward-looking Expectations index, which is forecasted to rise to 87.00 from the preceding month’s print of 80.1.
Apart from the IFO numbers, amid an absence of economic releases from the US docket, the broader market sentiment will be closely watched. The talk of a new $1 trillion-plus stimulus package in the US could to keep equities bid and the safe-haven US dollar under pressure.
US Dollar under pressure on Economic Recovery Hopes – Eyes on German IFO
Published on 2020-06-24 07:27
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