On Thursday, market participants shifted their attention from the topics of testing vaccines against COVID-19 and corporate reporting by companies to economic statistics and the situation with the spread of coronavirus in America.
A certain pullback in the markets, which is very similar to the banal profit taking, towards aversion to risk appetite led to an increase in the exchange rate of the US dollar against commodity currencies in the currency market, but in general, it failed to seize the initiative in a basket of major currencies. The growth in demand for the single currency in the wake of generally positive recent economic data did not allow it to do this.
The rise of the Eurocurrency is primarily due to the fact that in Europe, unlike the United States, it was possible to take control of the coronavirus pandemic, and the latest economic statistics have steadily demonstrated the continued smooth recovery of the region's economy.
On Thursday, the ECB meeting on monetary policy was held, which did not bring a surprise. All monetary policy parameters were left unchanged. Therefore, the attention of market players was drawn to the press conference of C. Lagarde, head of the European regulator. They discussed the consequences of the COVID-19 pandemic, talked about its devastating impact, but also reported the main thing that investors were waiting for - the preservation of "the need for sufficient monetary incentive." She also added that the ECB and the EU Recovery Fund will continue to support the region's economy. On this news, the euro exchange rate turned up, and on European stock markets there was even a slight pullback of the indices up.
On this day, important economic data on unemployment in Britain, the number of initial applications for unemployment benefits, retail sales and their volume in the United States, and the Philadelphia index of manufacturing activity for the month of June were published.
The unemployment rate in the UK remained unchanged at 3.9%, the number of applications for unemployment benefits declined by 28,100 and the average wage in May showed an increase of 0.7%, which was slightly higher than the forecast of 0.5%, but significantly lower than the April value in 1.7%. These statistics did not significantly affect the dynamics of the pound, which, like all currencies, remains captive to the issue of the COVID-19 pandemic.
US data also generally showed growth relative to forecasts, but are expected to be well below previous values. This is natural, because the pandemic, like in other economically developed countries of the world, caused a deep wound to the US economy.
On Thursday, all the attention of the market was largely centered around statistics on morbidity and mortality in the United States. It seems to us that traders continue to act in line with the swing, fully responding to media headlines. It is likely that they will reconsider their views today and turn their attention again to positive news, which will restimulate demand for risky assets and weaken the exchange rate of the US currency. In any case, the dynamics of futures for major European and American stock indices indicate this.
Forecast of the day:
Gold is trading in the range of 1795.15-1815.10 after reaching a local maximum. If the market sways in the direction of positivity today, then breaking through the price level of 1795.15 can lead to a decline to 1785.15.
The USD/CAD pair still remains in the range of 1.3500-1.3665. If oil prices turn up and the pair does not break the level of 1.3585, it will decline to 1.3500. At the same time, the continuation of their decline will become the basis for the price movement to 1.3665. Thus, the pair is expected to remain in the range in the near future.
