Posted by OFX AUD - Australian Dollar The Australian Dollar is fractionally lower this morning against the US Dollar trading around 0.6950. The advance of the local currency seems to be stalling just ahead of a key resistance levels against the Greenback having failed to extend the weeks early uptick and push … Continue reading "Aussie dollar range bound amid growing COVID19 concerns"The post Aussie dollar range bound amid growing COVID19 concerns appeared first on .
It’s a quiet day on the economic calendar. FED Chair Powell and BoE Governor Bailey are scheduled to speak. Expect Trump and COVID-19 to also influence.
Is the world underestimating the demand for oil amid the new explosion in coronavirus cases? Latest International Energy Agency stats suggest so, with the IEA forecasting more consumption that could help rebalancing. OPEC, meanwhile, is going the opposite way, calling for higher output from end-August that could lead to a tug-of-war in prices.
The Dollar/Yen finally broke out of its narrow trading range last week despite the recent two-sided shifts in investor sentiment.
Demand for risk will continue to set the tone. Risk sentiment will be lifted if scientists continue to make progress toward a coronavirus vaccine.
The next major move in the AUD/USD will be determined by how investors handle the two 50% levels at .6921 and .6889.
(Bloomberg) -- For all its flaws, the euro zone’s gravitational pull is proving hard to resist.Croatia and Bulgaria became the latest countries to inch closer to the bloc when they got the green light on Friday to enter the so-called waiting room to join the single currency. They would be the 20th and 21st members; Romania, another former communist state, hopes to be the 22nd.Less than a quarter of century since it was created, the euro area has been repeatedly buffeted by financial meltdowns that could have easily shattered the entire project.Yet those episodes also spurred governments to allow the European Central Bank to boost its powers in an effort to keep the bloc together. That’s proved to be a strong-enough argument for some that a shared currency -- which all European Union members are technically supposed to adopt, though Denmark has an opt-out and others have resisted -- still holds appeal.“It’s a tremendous vote of confidence in the EU and the euro if more countries want to join -- it’s a confidence booster,” said Gilles Moec, chief economist at AXA SA. “It may be a bit of a headache for the central bank, but expanding the euro area should boost its credibility as a currency for the entire EU.”Croatia and Bulgaria will now spend at least two years with their currencies pegged to the euro before they can become full members.When they do, they’ll gain full access to the massive financial backstop of the ECB, which has repeatedly stepped in to calm crises. As the coronavirus pandemic hit Europe, it announced a highly flexible bond-buying program specifically to keep down government borrowing costs in stressed economies such as Italy’s.They’ll also adopt the world’s second-biggest reserve currency, replacing a Croatian kuna and Bulgarian lev that never fully won public trust. Close to 80% of savings in Croatia are in euros, and at an event last year to mark the 25th anniversary of the kuna, central bank Governor Boris Vujcic said he hoped it would never reach its 30th.The nations are essentially pursuing a policy of being stronger inside a club, and choosing to look west in doing so, as other eastern European nations did before them.Slovenia was first to join in 2007. Slovakia grappled with currency instability before it entered in 2009. The Baltic republics of Estonia, Latvia and Lithuania, after massive economic meltdowns during the global financial crisis, joined from 2011 to 2015 in part due to geopolitical concerns related to their proximity to Russia.Croatia and Bulgaria are two of the EU’s poorest members, and both rely heavily on foreign tourism that has been crushed by the pandemic. They’ve already turned to the ECB to set up swap lines to access euros.“First and foremost, it’s a part of a political process,” said Simon Quijano-Evans, chief economist at Gemcorp Capital LLP in London. “But it makes complete economic sense as well.”Convergence ConundrumStill, membership has its risks. The loss of control over exchange rates means that euro members can’t devalue their way out of a crisis. Instead, they could be forced into a damaging spiral of falling prices and wages, as happened for southern European economies in the euro zone’s sovereign debt crisis.There is little sign that euro-zone membership alone drives a convergence in living standards. Italy has yet to regain the level of economic output from 2007, before the last financial crisis. That’s one reason why enthusiasm for the currency isn’t universal.Poland, the largest EU economy outside the bloc, says it won’t consider dumping the zloty until Polish living standards are equal to those in western Europe. Hungary’s central bank wants stronger membership criteria, including higher productivity, a more mature financial system and a close alignment of economic cycles. Czech Prime Minister Andrej Babis has repeatedly said he doesn’t want to help bail out struggling nations like Italy.The ECB’s own progress report published last month showed that Bulgaria and Croatia still have plenty of work to do before they can join the euro, especially on inflation and the health of public finances. Concerns have also been raised over whether Bulgaria has adequately fought corruption and money laundering, after financial crimes hit the region in recent years.For the central bank in Frankfurt, the new entrants raise the prospect that it’ll one day be called on yet again to step into prevent a localized financial crisis from spreading to the rest of the bloc. They may have tiny economies, but Greece still came close to splintering the currency union in 2015 despite accounting for less than 2% of euro-zone GDP.For Croatia and Bulgaria, better that than the alternative.“This crisis showed us that those that are in the euro zone and its waiting room will have access to billions of euros for recovery,” said Bulgarian Prime Minister Boyko Borissov. “Those who aren’t will take on debt, and with huge interest.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
USD/CAD made an attempt to get above the 20 EMA but failed to develop additional upside momentum.
Gold markets broke above the $1800 level this week, which can only be thought of as a major victory for the buyers.
Bulgaria and Croatia have been accepted into Exchange Rate Mechanism II, a precursor to adopting the euro as their currency over the next three years, the European Central Bank said in a statement on Friday. The central rate of the Bulgarian lev has been set 1.95583 against the euro while the Croatian kuna's central rate was set at 7.53450, the ECB said.
Gold markets struggled to follow through during the trading session on Friday after pulling back on Thursday.
The US dollar initially tried to rally for the week, but it is seeming that the ¥107.50 level continues to contain the dollar overall.
Infighting is hurting crypto, IOHK's Charles Hoskinson says, but he won't "apologize for kicking people in the teeth" on Twitter if someone is attacking Cardano or its community.
British pound has had a very bullish week, as we continue to see a rally. Every time it looks as if it is going to fall, buyer step in to pick up yet again.
The British pound rallied during the week, but continues to face resistance at the crucial ¥135 level. Because of this, I am not overly excited about this pair.
The Euro initially rally during the week, pulled back from the 200 week EMA, and then rallied again to close out a choppy week. This is normal for this pair.
The Australian dollar rallied again during the week,but we would struggle at 0.70. An area that has been important for some time and now looks like a range.
The US dollar had a rough day during the session on Friday, losing money against multiple currencies, and as a result the dollar lost against the yen as well.
The British pound initially fell a bit on Friday but continues to find support as we broke back above the 200 day EMA by the time New York got online.
British pound fell hard against the yen to kick off the session but found support at the 50 day EMA. We are forming a short-term range to determine where we go.
The Canadian dollar was little changed against its U.S. counterpart on Friday, recovering from an earlier 10-day low as higher oil and stock prices, as well as domestic data showing a record jobs gain offset worries about global trade prospects. Canada's economy added 952,900 jobs in June, mostly in the service sector, as firms reopened following closures triggered by COVID-19, data from Statistics Canada showed. U.S. stocks rose as a positive update from Gilead Sciences Inc's <GILD.O> antiviral drug to treat COVID-19 countered nerves over a record rise in coronavirus cases in the United States.
The Euro continues to be very choppy during the Friday session as markets have nowhere to be. At this point, it appears that we are stuck in consolidation.
The Australian dollar initially sold off on Friday but found buyers two show signs of resiliency yet again. We have a massive amount of resistance just above.
London stocks were likely to break a three-week losing streak on Friday, as equities moved higher thanks to gains for pharmaceutical and utility shares.