Review of the dollar, euro, pound, yen, aussie and gold prices for July 21, 2021


The European currency shows a slight decline against the US dollar during the Asian session, developing a fairly stable bearish trend, which pushes the instrument to new local lows since April 5. The atmosphere of risk distrust still prevails in the market. Investors are alarmed by another rise in the incidence of coronavirus in the world, fearing that the pace of economic recovery may slow down again, and some countries will introduce new restrictive measures. The macroeconomic statistics published yesterday from Germany and the eurozone did not provide additional support for the euro. Thus, manufacturing inflation in Germany in June accelerated from + 7.2% y / y to + 8.5% y / y, which coincided with analysts’ forecasts. On a monthly basis, the indicator slowed down from + 1.5% m / m to + 1.3% m / m, being slightly better than forecasts at + 1.2% m / m. At the moment, investors are preparing for the meeting of the European Central Bank (ECB), which will take place tomorrow. Analysts do not expect any changes in the vector of the regulator’s monetary policy, but comments from officials and updated forecasts for the near future will be very interesting.


The British pound is trading with multidirectional dynamics against the US dollar during the morning session, recovering from a sharp collapse the day before, which led to the renewal of local minimums for the instrument since February 4. The growing demand for safe assets is pushing investors to new sales of the British currency, which cannot find new drivers in the market. The reason for the decrease in the demand for risk remains the difficult epidemiological situation in the world. The UK, which recently lifted the country’s latest coronavirus restrictions, is also facing a sharp rise in new infections. This is not to say that such statistics are something surprising, since the authorities initially predicted an increase in the incidence, but the question is whether the British health care resources will be enough and whether the new wave will lead to a sharp increase in hospitalizations and mortality. Interesting macroeconomic statistics from the UK will appear only on Friday. Investors are awaiting the release of June retail sales and business activity data from Markit for July.


The Australian dollar declines against the US currency in the Asian session, developing a strong “bearish” momentum, which was formed last Thursday. Since then, the instrument has sagged noticeably and updated record lows since November 24, 2020. The reason for the development of negative dynamics remains the growing fears about the deterioration of the global epidemiological situation, which can slow down the recovery of the world economy. WHO warns of the existing risks of new strains of coronavirus, however, at the moment, a number of countries are reporting a record daily increase in the number of cases. Additional pressure on the instrument today is exerted by macroeconomic statistics from Australia. Thus, the volume of retail sales in the country in June fell sharply by 1.8% mom after growing by 0.4% mom in May. Analysts had expected negative dynamics to appear, but hoped for a reduction of only 0.5% m / m. The index of leading economic indicators from Westpac in June fell by 0.07% m / m, which is slightly worse than the fall of 0.06% m / m in May.


The US dollar is trading flat against the Japanese yen in Asia, consolidating around 110.00. The American currency is still popular as a “safe haven” given that investors are alarmed by a possible worsening of the epidemiological situation in the world. However, the yen is also in demand, which is partly supported by upbeat macroeconomic statistics from Japan. The day before, investors reacted positively to a weak rise in consumer inflation in June, and today the yen is supported by export data. Thus, in June, the volume of exports from the country increased by 48.6% y / y, which turned out to be better than forecasts at the level of 46.2% y / y. Over the same period, imports accelerated from + 27.9% y / y to + 32.7% y / y, while expectations assumed growth of only 29% y / y.


Gold prices show near-zero trading dynamics during the Asian session, consolidating near 1800.00. The day before, the instrument has significantly strengthened, responding to the growing alarming sentiment in the market regarding the statistics on the incidence of coronavirus. Later, however, quotes returned to their opening levels as the dollar strengthened on the back of rising Treasury yields. Despite all the efforts of the authorities and an active vaccination campaign, a sharp increase in the number of new cases of infection is noted in the United States, Great Britain and a number of Asian countries, which have already gone to additional restrictions. A definite marker in this sense is Japan, where the Summer Olympic Games are held.

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