The Greenback increases as US labour data continues to be sluggish and more outbreaks of Covid-19 show that the virus is far from gone.

OFX Daily Market News

Posted by OFX

USD – United States Dollar

Localized outbreaks of Covid-19 in China and the US serve as a reminder that the risks from the virus are far from going away. This has helped the US dollar to increase as a safe haven versus other major currencies this morning. The US dollar has increased 0.24%, 1.02%, 0.2% and 0.56% versus the Euro, Pound, Loonie, and Aussie dollar respectively. Furthermore, emerging market currencies slid as concern about a second wave of the pandemic outweighed optimism resulting from stimulus measures. The Mexican peso and South African Rand have fallen 1.51% and 1.61% respectively versus the Greenback this morning.

The weekly jobless claims report was published for the week ending June 13th this morning. 1.51 million people in the U.S. filed for jobless benefits last week, only slightly below the prior week, and above all economist estimates. Continuing claims, the total pool of people on ongoing benefits, also slightly decreased *from 20.54 million to 20.61 million,* which shows the fragility of the labour market.

Key Movers

After three months of emergency stimulus by the Bank of England (BoE), the situation in the British financial markets has improved. The combination of the £200 billion quantitative easing package and the commercial paper scheme has helped the market return to something close to normality. Earlier today, the BoE and the Monetary Policy Committee voted 9-0 to keep rates on hold at 0.1%. The decision to lift the asset purchase target by 100 billion pounds to 745 billion pounds was backed by eight members, as expected. However, the BoE also signaled plans to slow the pace of asset purchases, completing the latest round by the end of 2020. This suggests that the BoE will remain cautious until it has a better idea of the shape of the recovery later this year.

According to the May ADP Canada National Employment Report, employment in Canada increased by 208,400 jobs from April to May. This report, which is derived from actual ADP payroll data, measures the change in total nonfarm payroll employment each month. At the same time, according to Statistics Canada, amid the pandemic situation, wholesale sales plummeted an unprecedented 21.6% to $49.8 billion in April, the lowest level since July 2013. All seven subsectors recorded lower sales for the first time since November 2008.

Expected Ranges

USD/CAD: 1.3501 – 1.3686 ▲

EUR/USD: 1.1199 – 1.1252 ▼

GBP/USD: 1.2402 – 1.2499 ▼

AUD/USD: 0.6777 – 0.6886 ▼

NZD/USD: 0.6380 – 0.6459 ▼


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