Monex: EUR/USD stijgt naar hoogste niveau sinds maart door hoop op virusvaccin
Hieronder volgt een commentaar in het Engels van Ranko Berich, Head of Research bij Monex Europe op de Amerikaanse dollar, euro en het Britse pond.
The euro extended its rally from yesterday at the expense of the dollar on the back of improved risk sentiment, surging to levels not seen since March this morning. Following the visit of Italy’s Prime Minister Giuseppe Conte to see German Chancellor Angela Merkel on Monday, Spanish Prime Minister Pedro Sanchez paid a visit to the German Chancellor on Tuesday. Merkel repeated that time is of the essence for EU members to reach a deal for the recovery fund and said that Germany will go to Brussels with a “certain reserve of compromise”, while Sanchez said that Spain would pull out all the stops in order to forge an accord this month, insisting that a delay is not an option. In Germany’s neighbouring country, Dutch Prime Minister Mark Rutte, who is seen as the frontman in the resistance to the EU recovery plan, stressed his demand for stronger conditions tied to the grants and repeated the need for a governance structure that would monitor reforms. The composition of the recovery fund will be discussed on Friday when EU members are set to meet.
After spending most of yesterday’s session relatively well supported by a deteriorating risk climate in markets, the dollar’s strength tailed off in the back-end of yesterday’s session as the results of Moderna’s testing hit the wires. There were glimpses of positivity in the Covid data for the sunbelt states too, with Arizona’s new confirmed cases falling below last week’s 7-day moving average. Florida also saw a decline in new cases, with 9.194 reported yesterday marking a 3.3% increase vs the previous 7-day moving average of 4.6%. Although these statistics are at the mercy of the number of tests being conducted, the numbers do seem to be stabilising, albeit at an elevated level. The main concern now is California who posted 12,854 new cases yesterday, its highest one-day increase to date and only 10-days after its previous peak. Yesterday also saw the Fed’s Lael Brainard paint a somber picture of the US economy, stating that the central bank’s focus is likely to pivot from “stabilization to accommodation”.
It was another tumultuous session for the pound yesterday as risk sentiment chopped and changed, flinging the pound with it. After the GDP print for May undershot expectations by a wide margin, coming in at 1.8% MoM compared with expectations of a 5.5% rebound, the pound spent most of the day in the red. Additionally, yesterday’s Office of Budget Responsibility’s fiscal sustainability report could almost be cast to the rubbish bin upon publishing as it adjusted for neither the latest fiscal stimulus measures announced by Chancellor Sunak last week nor the latest GDP figures, to no fault of the OBR. The pound was dragged up by its bootstraps from the day’s lows by broad US dollar weakness in the afternoon of yesterday’s session, however, to close the day only marginally lower. News that Moderna’s vaccine provided all test subjects with some level of antibodies turned market sentiment and the dollar lower once the news was announced after Wall Street had closed. This morning, with the dollar broadly lower against the G10, sterling is making hay while the sun shines. GBPUSD sits near the top of the G10 pack, following its recent trend of being more exposed to global market sentiment and trading with volatility seen in other currencies with small, open economies such as NOK and AUD. The only data released today was June’s CPI, which rose to 0.6% from 0.5% in May predominantly due to a spike in the prices of “games, toys and hobbies”, which rose from 1.0% in May to 7.9% in June.