The market mood is calm after three consecutive positive days and despite growing covid concerns. The safe-haven dollar is down, except against the euro, which is pressured after the dovish ECB meeting. Gold and oil are edging higher. Preliminary PMIs are eyed.
US shares are stabilizing after three consecutive days of gains, compensating for Monday’s sell-off. Tech company earnings have contributed to the upbeat mood while growing worries of the Delta COVID-19 variant are ignored .
Coronavirus: America’s CDC issued a stark warning about the spread of the highly transmissible strain and German Chancellor Angela Merkel also expressed concern. Italy followed France by requiring vaccine passports surely activities and therefore the opening ceremony for Tokyo’s Olympic Games are going to be held with few spectators.
The US dollar is on the rear foot, trading in tandem with falling 10-year Treasury yields, which have did not recapture the 1.30% level. Lower returns on US debt also support gold, which is holding above $1,800.
EUR/USD stands out by trading on the brink of the three-month lows. the ecu financial institution enhanced its forward guidance regarding raising rates, conditioning any longer by forecasting a 2% annual increase in prices within the middle and toward the top of its policy horizon of three years. The bank also wants to ascertain core inflation rise and would allow a short lived overshoot.
ECB Analysis: Three dovish changes hit EUR/USD, more might be future
GBP/USD is holding onto gains above 1.3750 after UK Retail Sales exceeded estimates, rising by 0.5% in June. British government has eased self-isolation rules following the country’s “pingdemic” – many thousands are called to quarantine a day , causing disruptions to the economy. the united kingdom and therefore the EU remain at Woods over the Northern Irish protocol, which London wants to rewrite and Brussels refuses to.
Markit’s preliminary Purchasing Managers’ Indexes for July are being released on Friday, with economists expecting the figures to edge off the highs. Worries about the virus, supply-chain issues and staff shortages may push PMIs lower.
US Markit PMIs Preview: Pre-weekend dollar boost? Downbeat figures could exacerbate risk-off mood
Cryptocurrencies are extending their recovery, with Bitcoin flirting with $33,000 and Ethereum advancing toward $2,100. WTI petroleum is hovering around $71, up from the low levels seen early within the week.