AUDUSD, H1
The Dollar has remained soft, with risk sentiment in global markets holding up, albeit with a weakening grip. Wall Street finished with modest gains yesterday, while the USA500 is moderately in the negative, and while Asian and European markets have gained, they are up by only a limited extent. US President Trump is weighing military action and imposing curfews in cities across the country in an effort to quell rioting, while there are glass-half-full market narratives arguing that, with many assets having recouped to pre-pandemic levels, there may be less upside potential with most economies across the world not expected to fully recover until such time as there is a vaccine or cure for the coronavirus.
Despite the flagging risk-on tone, the narrow trade-weighted USDIndex edged out a new low, at 97.74, which is the lowest level seen since March 16th. EURUSD has remained buoyant, and has breached yesterday’s 11-week high at 1.1155, to trade to 1.1178. USDJPY remained in a narrow range in the mid-to-upper reaches of the 107.00s, which has been the case for about two weeks now. Sterling has outperformed on Brexit-related news, with the London Times reporting that the UK government is expected to signal a compromise on fisheries and “level playing field” trade rules if the EU backs off from its “maximalist” demands on regulatory alignment and fishing access, according to unnamed sources. Cable printed a one-month peak at 1.2555, while EURGBP fell to an 18-day low at 0.8865. AUDUSD edged out a fresh four-month high, at 0.6844. The RBA did the expected and left monetary policy unchanged at its June review today, maintaining the cash rate at 0.25%, while signalling that “the accommodative approach will be maintained as long as it is required.” USDCAD printed a fresh trend low at 1.3507, the lowest seen since March 9th. The Canadian Dollar, like other oil-correlating currencies, remains supported by the ongoing buoyancy in oil prices, ahead of the rescheduled OPEC+ meeting this week, while USOil trades at $36.00 currently.
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Stuart Cowell
Head Market Analyst
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