Dollar Struggles Across the Board
The dollar realized further declines on Tuesday as the index closed 0.58% lower. The coronavirus situation in the US is taking a further toll as cases arise. President Trump stated that the outbreak is likely to worsen.
Further struggles to reach a consensus on the next round of economic stimulus measures drag on. This weakened the dollar to deeper territories as investors turned to riskier assets.
Euro Rejuvenated After EU Agreement
The euro traded at its highest level in more than a year in the morning session, breaking above 1.15. This comes as European leaders struck an agreement for a €750bn pandemic recovery fund.
Progress towards a coronavirus vaccine also weighed on the US dollar. This came as European biopharma companies reported encouraging trial results.
Pound Bullish But Brexit Uncertainty Looms
The pound kept its momentum against the weakened US dollar, closing 0.54% higher on Tuesday. GBPUSD recorded highs above the 1.27 handle.
This morning, cable is slightly down against the dollar amid reports of a no-deal Brexit. UK ministers have expressed skepticism over the current Brexit negotiations.
In addition, government officials recently abandoned hopes of reaching a US-UK trade deal by November.
Asia-Pacific Buoyed Over Weakened Greenback
Asian stocks ended mixed on Tuesday. While investors praised the EU’s stimulus plan, rising infection numbers dented optimism.
The yen closed 0.40% over the dollar on Tuesday, indicating a further push towards the safe-haven asset.
Aussie crossed over 0.71, closing the highest since April last year. The neighboring Kiwi also edged up above 0.66, advancing to its highest level in 2020.
Mixed Bag for US Stocks
The S&P increased for a third consecutive day, led by gains in the energy and financial sectors.
The technology sector lost momentum, however, leading Nasdaq 0.8% lower.
Investors are awaiting earnings reports from Tesla and Microsoft later today. This could see the index recovering yesterday’s losses.
Further Breakthrough for the Yellow Metal
Gold reached another milestone overnight, rising above $1860. This move was urged on by Trump’s comments that the coronavirus will ‘get worse before it gets better’.
Furthermore, US officials debate over the renewal of the expiration of the unemployment benefits. The next stimulus bill, however, must be agreed upon before the end of July.
Crude Traders Eye EIA Following Poor API
Oil prices rose over $42 in yesterday’s trading. However, crude retracted many of its gains by the end of the day.
Weak API figures left oil prices on a precarious footing. With investors assessing the impact on demand from the increasing US virus figures, prices could remain mixed for the short-term.