On Friday, July 9, the US dollar is recovering from yesterday’s decline, consolidating near its three-month highs. The demand for defensive assets is growing in the foreign exchange market amid new outbreaks of the new strain of coronavirus in a number of countries.
As of 11:49 Moscow time, EUR / USD is down 0.06% and is trading at 1.18372, while the DXY dollar index is up 0.08% at 92.483. At the end of the previous trading session, the main currency pair gained 0.40% to reach 1.18447, while the DXY indicator closed 0.26% in the red at 92.406.
The American currency is in demand amid risk-off sentiment in foreign exchange markets due to the rapid spread of the new strain of the Delta coronavirus in a number of large countries. So, in Japan, it was decided to extend the state of emergency in Tokyo and the southern prefecture of Okinawa until August 22 due to an increase in the incidence of the population. This means that the Summer Olympics will be held without spectators. In addition, an increase in infections and deaths has been observed in the United States and the United Kingdom, despite significant progress in vaccination.
In this regard, it is worth noting the comments of the head of the Federal Reserve Bank of San Francisco Mary Daly that at the moment the key risk for the global economy is the proclamation of victory over the coronavirus too early, while the real situation remains uncertain. According to her, further growth of the global economy requires an increase in the rate of vaccination around the world, otherwise the threats from Covid-19 will persist.
OECD Secretary General Mathias Kormann adheres to a similar position. In his opinion, the rapid spread of the new Delta coronavirus strain is a key risk in terms of the sustainability of the global economic recovery.
In terms of macroeconomic statistics, yesterday the US released data on the number of initial applications for unemployment benefits. At the end of last week, the indicator unexpectedly rose to 373 thousand compared to the previous result of 371 thousand, while analysts expected a decrease to 350 thousand.
Today it will be necessary to follow the publication in the United States of data on inventories in wholesale warehouses.
The EUR / USD rate is consolidating near the 1.1800 level after a prolonged decline. Stochastic lines are located near the oversold zone and directed upward, which indicates in favor of corrective growth / consolidation for the instrument in the short-term horizon.
This information is not investment advice.