U.S. dollar remained at a 1-month high

Juni 29, 2020 13:30

Sentiment in the markets did not improve last week, so investors remained cautious, which led to the U.S. dollar remaining at its highest level in June. The growing number of new cases of the virus in the United States and the volatile economic data in the country do not allow market participants to expect a Form V recovery.

U.S. economic indicators remained highly volatile and supported concerns among market participants about future prospects. The preliminary manufacturing PMI index reached 49.6 points and recorded a marked recovery in sentiment among business participants, which was one of the most positive signs in recent weeks. Meanwhile, real estate secondary market sales fell -9.7% in May from a month earlier, but new home sales showed recovery and recorded a 16.6% rise from April. With the number of unemployed remaining high in the country, access to credit is likely to decline, which will reduce liquidity in the market while negatively affecting the number of transactions. The number of new jobless claims remained unchanged at 1.5 million per week.

USD

The coronavirus news did not promise anything positive. In the U.S., the number of new cases has grown rapidly above the level of 40,000 per day. Florida and Texas are once again introducing strict requirements and closing bars to reduce the spread of the virus. In Brazil, the number of new cases remained high at 40,000, while in India, further growth was recorded at the level of 20,000, the highest point to date. In Russia, the number has fallen moderately to 7 thousand a day and the trend in recent weeks is positive.

Euro

The main currency pair EUR/USD reflected the trends of the U.S. dollar and the pair appreciated at the beginning of the week and later depreciated. Economic data in Europe showed positive signs, with the manufacturing PMI index rising to 44.6 points in Germany and 46.9 points in Europe. During a press conference for European Central Bank President Christine Lagarde, she said the worst is expected to show signs of improvement in the economy in the past and in the coming months. EUR/USD pair has ended the week appreciating 0.4%.

JPY

The main Asian pair, USD/JPY depreciated at the beginning of the week, but later recovered and the overall result for the week was positive. Among the economic data was preliminary manufacturing PMI index, which remained in the negative territory and was 37.8 points. The inflation rate calculated by the central bank, which eliminates energy and food prices, was 0.0% and was at the deflationary threshold. USD/JPY ended the week appreciating +0.3%.

GBP

The British pound depreciated against the U.S. dollar, despite relatively good business sentiment, according to survey data. The preliminary manufacturing PMI rose from 40.7 to 50.1 points and returned to a positive growth area. However, the pair fell to 1-month lows. GBP/USD has ended the week depreciating -0.1%.

Economic Events

This week will start with preliminary inflation data for Spain and Germany in June and preliminary real estate transaction data in the U.S. Industry changes in South Korean and Japan will be monitored on Tuesday, since both countries are significant exporters, and the data should reflect overall global sentiment. Preliminary European inflation and U.S. consumer confidence data will also be expected on Tuesday. South Korea's export volumes and key economies manufacturing PMI index data will be monitored on Wednesday. The minutes of the last meeting of the U.S. Federal Reserve will be announced on Wednesday evening, where investors will look for clues about the bank's next steps. On Friday, the focus will be on the results of the U.S. labour market, which will show how the number of jobs has changed and what the unemployment rate is in the country.

According to Admiral Markets market sentiment data, 51% of investors have long positions in the EUR/USD pair (increased +2 percentage points from last week's data). In the main Asian pair USD/JPY, 62% of investors have long positions (decreased -7 percentage points). In the GBP/USD pair, 58% of participants expect a rise (down -2 percentage points). Such market data are interpreted as contraindicative, therefore GBP/USD and USD/JPY are expected to depreciate and the EUR/USD position remains neutral. The analysis of positioning data needs to be combined with fundamental projections and technical analysis.

Sources: bloomberg.com, reuters.com, Admiral Markets MT4 Supreme Edition, investing.com


Discover the world's #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks

.

Avatar-Admirals
Admirals Eine Komplettlösung für das Bezahlen, Investieren und Verwalten Ihres Geldes

Admirals ist mehr als ein Broker. Wir sind der Dreh-und Angelpunkt für Ihre Finanzen, indem wir Ihnen eine breite Palette von Finanzprodukten und -dienstleistungen anbieten. Wir machen es möglich, persönliche Finanzen durch eine Komplettlösung für das Investieren, Ausgeben und Verwalten von Geld anzugehen.