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Dollar Recovers Well After Hitting Over 2-year Low, Gains Against Peers

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After plunging to its level in more than 2 years in the Asian session on Friday, the U.S. dollar rallied sharply to score fairly impressive gains against most of its peers, as risk sentiment faded a bit amid rising concerns about the economic impact of the virus outbreak.

A report released by the Commerce Department showed personal income in the U.S. slumped by more than expected in the month of June. The report also showed a substantial increase in personal spending.

The report said personal income tumbled by 1.1% in June after plunging by a downwardly revised 4.4% in May. Economists had expected personal income to decrease by 0.5% compared to the 4.2% nosedive originally reported for the previous month.

The report said personal spending surged up by 5.6% in June after skyrocketing by an upwardly revised 8.5% in May. Personal spending had been expected to jump by 5.5% compared to the 8.2% spike originally reported for the previous month.

Consumer sentiment in the U.S. deteriorated by more than initially estimated in the month of July, according to a report released by the University of Michigan on Friday. The report said the consumer sentiment index for July was downwardly revised to 72.5 from the preliminary reading of 73.2. The index is down from 78.1 in June and below economist estimates for a reading of 73.0.

The dollar index, which slipped to 92.55, rallied to 93.54 in late afternoon trades, adding more than 0.55% to its overnight level.

Against the Euro, the dollar strengthened to $1.1765, gaining about 0.7%. The euro area economy contracted at the fastest pace on record in the second quarter amid the coronavirus pandemic, preliminary flash estimate published by Eurostat showed Friday. Gross domestic product fell 12.1% on a quarterly basis, bigger than the 3.6% drop in the first quarter. This was bigger than the economists’ forecast of 11.2% and was the sharpest decline seen since the series began in 1995.

Year-on-year, GDP was down 15% in the second quarter versus a 3.1% decline a quarter ago. GDP was expected to fall 13.9%.

The Pound Sterling was down marginally with the dollar firming up to $1.3087 a unit of Sterling.

The Japanese Yen tumbled to 106.05 a dollar and recovered slightly to 105.95 subsequently, but was still down with a sharp loss of about 1.15%.

Against the Aussie, the dollar firmed up to $0.7141, gaining 0.75% from Thursday’s close of $0.7195.

The Swiss franc was weaker at 0.9139, losing ground its previous close of 0.9089.

The Loonie was flat at 1.3415 a dollar, giving up gains, after trading at 1.3372 a dollar at one stage. Data released by Statistics Canada this morning showed the Canadian economy grew 4.5% over a month earlier in May 2020, recovering from a record 11.6% contraction in April and compared with market expectations of a 3.5% expansion.

The material has been provided by InstaForex Company – www.instaforex.com

Crude Oil Futures Settle High

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Crude oil futures closed higher on Friday, bouncing back from losses in the previous session, buoyed by a report from U.S. Energy Information Administration that said oil production fell sharply in May.

However, concerns about energy demand outlook due to continued worries about the economy amid the rapid spread of coronavirus pandemic, and mixed economic data from several parts of the world limited oil’s upside.

A likely uptick in production as OPEC and allies prepare to relax output curbs by 2 million barrels a day from Saturday too capped oil’s rise.

West Texas Intermediate Crude oil futures for September ended up $0.35 or about 0.9% at $40.27 a barrel.

Brent crude futures moved up $0.24 or about 0.7% to $43.18 a barrel.

According to the monthly report from EIA, crude oil production in the U.S. fell a record 2 million barrels per day to 10 million barrels per day.

According to a report from Baker Hughes, the number of U.S. oil rigs dropped by one to 180 this week.

The material has been provided by InstaForex Company – www.instaforex.com

Australia Data Due On Thursday

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Australia will on Thursday release June data for building permits and Q2 numbers for import and export prices, highlighting a modest day for Asia-Pacific economic activity.

Building permits are expected to add 1.5 percent on month after tumbling 16.4 percent in May. In Q1, export prices were up 2.7 percent on quarter and import prices fell 1.0 percent.

Japan will provide June numbers for retail sales; in May, sales were up 2.1 percent on month and down 12.3 percent on year.

New Zealand will release June figures for building permits; in May, permits surged 35.6 percent on month.

Singapore will see Q2 results for its business confidence index; in the previous three months, the index score was -56.0.

Hong Kong will release June figures for retail sales; in May, sales plummeted 33.9 percent on year.

The material has been provided by InstaForex Company – www.instaforex.com

South Korea Business Sentiment Improves In July

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Business sentiment in South Korea’s manufacturing sector strengthened in July, the latest survey from the Bank of Korea showed on Thursday with an index score of 57.0 – up from 51.0 in June.

The outlook for the following month also rose by 9 points to 60.0.

In the non-manufacturing sector, the BSI on business conditions for July 2020 was 62, up 2 points from the previous month, and that for the outlook for the following month also rose by 1 point to 60.

The Economic Sentiment Index (ESI) – a composite of the BSI and the CSI (Consumer Survey Index) – for July 2020 was 69.5, up 6.4 points from June 2020.

The material has been provided by InstaForex Company – www.instaforex.com

*South Korea Business Sentiment Survey 57.9 In July – BoK

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South Korea Business Sentiment Survey 57.9 In July – BoK

The material has been provided by InstaForex Company – www.instaforex.com

Dollar Slips To 2-year Low; Loses Ground Against Its Peers

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The U.S. dollar tumbled to a two-year low on Wednesday, after snapping having snapped a losing streak a day earlier, weighed down by rising coronavirus cases across U.S., and the Federal Reserve’s comments that interest rates will remain at near-zero levels amid the economic hardship imposed by the coronavirus pandemic.

The Fed said it decided to maintain the target range for the federal funds rate at zero to 0.25%, where it has remained since an emergency rate cut on March 15.

The accompanying statement noted economic activity and employment have picked up somewhat in recent months following sharp declines but remain well below their levels at the beginning of the year.

The central bank partly attributed the recent improvement in overall financial conditions to policy measures to support the economy and the flow of credit to U.S. households and businesses.

The Fed also reiterated that it remains committed to using its full range of tools to support the U.S. economy in this challenging time.

In addition to keeping interest rates at current levels until it is confident the economy has weathered recent events, the Fed said it will also continue to increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace.

The dollar index fell to 93.18 and was last seen at 93.29, down 0.44% from previous close.

Against the Euro, the dollar weakened to $1.1806 before recovering slightly to $1.1793. It had settled at $1.1715 a day earlier.

The Pound Sterling strengthened with a unit of sterling fetching $1.2994, compared with $1.2930 on Tuesday.

The Japanese currency Yen was stronger at 104.94 a dollar, firming up from 105.09.

Against the Aussie, the dollar weakened to 0.7188, giving up more than 0.4%. The Swiss franc was stronger by nearly 0.6% at CHF0.9127 a dollar, gaining from CHF0.9179, while the Loonie was up by about 0.3% at C$1.3338.

A report released by the National Association of Realtors said pending home sales in the U.S. showed a significant increase in the month of June. NAR said its pending home sales index surged up by 16.6% to 116.1 in June after skyrocketing by 44.3% to 99.6 in May. Economists had expected pending home sales to jump by 15%.

In coronavirus news, several U.S. states in the South and West reported their biggest one-day increase in coronavirus deaths Tuesday, fueling a bitter debate over the reopening of schools in the coming weeks.

The material has been provided by InstaForex Company – www.instaforex.com

Treasuries Close Nearly Unchanged Following Choppy Trading Day

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Treasuries showed a lack of direction over the course of the trading session on Wednesday before ending the day nearly flat.

Bond prices spent the day bouncing back and forth across the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 0.579 percent.

The ten-year yield showed only a slight drop on the day but still ended the session at its lowest closing level in three months.

The choppy trading on the day came as traders awaited the Federal Reserve’s monetary policy decision, although treasuries remained little changed following the announcement.

As was widely expected, the Fed announced that interest rates will remain at near-zero levels amid the economic hardship imposed by the coronavirus pandemic.

The Fed said it decided to maintain the target range for the federal funds rate at 0 to 0.25 percent, where it has remained since an emergency rate cut on March 15.

The accompanying statement noted economic activity and employment have picked up somewhat in recent months following sharp declines but remain well below their levels at the beginning of the year.

The central bank partly attributed the recent improvement in overall financial conditions to policy measures to support the economy and the flow of credit to U.S. households and businesses.

The Fed also reiterated that it remains committed to using its full range of tools to support the U.S. economy in this challenging time.

Some investors may have been disappointed the Fed’s statement did not provide specific clues about further stimulus, although it did not impact the bond markets.

Traders also shrugged off a report from the National Association of Realtors showing another significant increase in pending home sales in the month of June.

NAR said its pending home sales index surged up by 16.6 percent to 116.1 in June after skyrocketing by 44.3 percent to 99.6 in May. Economists had expected pending home sales to jump by 15.0 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

With the continued increase in contract activity, pending home sales in June were up by 6.3 percent compared to the same month a year ago.

Trading on Thursday may be impacted by reaction to the weekly jobless claims report as well as a preliminary reading on GDP in the second quarter.

The material has been provided by InstaForex Company – www.instaforex.com

Crude Oil Futures Settle Higher After Data Shows Drop In Inventories

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Stock Market Growth On Screen

Crude oil prices moved higher on Wednesday after official data showed a much larger than expected decline in U.S. crude inventories in the week ended July 24.

However, gains were just modest for crude oil futures as worries about energy demand outlook persisted due to continued surge in new coronavirus cases across the world.

West Texas Intermediate Crude oil futures for September ended up $0.23 or about 0.6% at $41.27 a barrel.

Brent crude futures moved up $0.45 to $43.67 a barrel.

According to the data released by the Energy Information Administration (EIA) this morning, crude oil inventories in the U.S. declined by as much as 10.6 million barrels last week, after rising by 4.9 million barrels a week earlier.

Late on Tuesday, the American Petroleum Institute released a report that said oil inventories declined 6.83 million barrels last week, almost twice the expected drop.

The EIA report showed gasoline inventories were up 700,000 barrels last week, compared with 1.8 million-barrel draw in the previous week.

Meanwhile, distillate fuels invntory increased by half a million barrels, compared with a 1.1 million barrels increase a week earlier.

In coronavirus news, several U.S. states in the South and West reported their biggest one-day increase in coronavirus deaths Tuesday, fueling a bitter debate over the reopening of schools in the coming weeks.

Mainland China has reported 101 new cases of the novel coronavirus – the highest number in more than three and a half months.

Hong Kong leader Carrie Lam warned that the city was on the brink of a large-scale outbreak and tightened lockdown measures.

Japan topped 1,000 Covid-19 cases for first time as Osaka and Aichi set daily records.

The material has been provided by InstaForex Company – www.instaforex.com

Gold Futures Extend Gains To 9th Straight Session

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Gold futures settled higher on Wednesday, extending gains to a ninth successive session, thanks to continued safe-haven demand amid the relentless surge in coronavirus cases across the world.

The dollar’s retreat contributed as well to gold’s uptick. The dollar index, which rebounded on Tuesday after recent losses, slipped to 93.28, losing more than 0.4%.

After settling for the session at fresh record high, gold futures gained further ground after the U.S. Federal Reserve said it plans to keep interest rates near zero until the economy improves.

Gold futures for August gained $8.80 or about 0.5% to settle at $1,953.40 an ounce. The contract

Silver futures for September advanced $0.021 to $24.321 an ounce, while Copper futures for September settled at $2.9190 per pound, gaining $0.0015 for the session.

A report released by the National Association of Realtors said pending home sales in the U.S. showed a significant increase in the month of June. NAR said its pending home sales index surged up by 16.6% to 116.1 in June after skyrocketing by 44.3% to 99.6 in May. Economists had expected pending home sales to jump by 15%.

In a widely expected move, the Federal Reserve announced today that interest rates will remain at near-zero levels amid the economic hardship imposed by the coronavirus pandemic.

The Fed said it decided to maintain the target range for the federal funds rate at zero to 0.25%, where it has remained since an emergency rate cut on March 15.

The accompanying statement noted economic activity and employment have picked up somewhat in recent months following sharp declines but remain well below their levels at the beginning of the year.

The central bank partly attributed the recent improvement in overall financial conditions to policy measures to support the economy and the flow of credit to U.S. households and businesses.

The Fed also reiterated that it remains committed to using its full range of tools to support the U.S. economy in this challenging time. In addition to keeping interest rates at current levels until it is confident the economy has weathered recent events, the Fed said it will also continue to increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace.

The material has been provided by InstaForex Company – www.instaforex.com

*Fed Chair Jerome Powell Begins Post-Meeting Press Conference

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Fed Chair Jerome Powell Begins Post-Meeting Press Conference

The material has been provided by InstaForex Company – www.instaforex.com

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