The US FDA approved the Fast Track designation to the joint coronavirus vaccine efforts made by German Biotech and US pharmaceutical Pfizer. This news coupled with the reluctance of government to initiate another lockdown helped fuel investor optimism. Hence, risk appetite was the order of the day on Monday, weighing on the American currency.
The EUR/USD pair reached 1.1375, retreating ahead of the US close to finish at 1.1342. The pound posted a bad performance, losing grasp of the 1.2600 level against the dollar. It was weighed by lack of Brexit talk progress and talks of negative rates.
Equities suffered sell-off toward the US close for no other reason but profit taking in preparation for the start of big banks earning calls on Tuesday. Commodities felt the impact of this sell-off but held within familiar levels. Gold settled at $1,804 a troy ounce, while WTI finished the day around $39.60 a barrel.
The DJIA rose 11.4 points or by 0.04%, to 26, 086.34, the S&P 500 lost 29.69 points to 0.93% to 3,155.35 and the NASDAQ Composite dropped 226.60 points or 2.13% to 10,390.84, falling back below the June highs after reaching an all-time high.
On Tuesday, the dollar traded with a stronger tone against most of its major rivals at the beginning of the day amid a fearful market mood triggered late on Monday by coronavirus-related headlines in the US.
EURUSD pierced through the year high, trading as high as 1.1406. GBPUSD ended the day flat 1.2550 weighed by monthly GDP that failed expectation. GDP was up by 1.8% in May, below 5% expected. AUD/USD settled around 0.6940, while USD/CAD finished the day just above 1.3600.
Spot gold dipped to $1,790 a troy ounce but bounced back to settle at $1810. Crude oil prices held within familiar levels, with WTI settling at $40.20 a barrel.
The Dow Jones unofficially closes up 561.66 points, or 2.15%, at 26,647.46. The NASDAQ unofficially closes up 101.43 points, or 0.98%, at 10,492.27. The S&P 500 unofficially closes up 42.54 points, or 1.35%, at 3,197.76.
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On Wednesday, the EUR/USD pair surged to 1.1451 as speculative interest pressed down the greenback, although with Wall Street easing from intraday highs, the dollar recovered ahead of the close. The pair settled just above the 1.1400 level. Upbeat UK inflation data helped GBP/USD reach an intraday high of 1.2649, although the pair retreated sub-1.2600 ahead of the close.
Gold seesawed between gains and losses throughout the day, ending it little changed around $1,810 a troy ounce. WTI extended its advance to $ 41.00 a barrel.
The S&P 500 rose 29.04 points, or 0.9%, to 3,226.56. The Dow Jones Industrial Average gained 227.51 points, or 0.9%, to 26,870.10. The Nasdaq Composite added 61.91 points, or 0.6%, to 10,550.49.
On Thursday, it became apparent that if there was any chance for an economic recovery, it would not be as fast as the general market hopes. Major pairs were choppy and stayed around familiar levels with EURUSD, GBPUSD, and AUDUSD losing the 1.1400, 0.7000, and 1.2600 levels respectively.
Gold lost the 1,800 level, settling around $1,795 a troy ounce. Crude oil prices continued to trade uneventfully, with WTI settling around $ 40.00 a barrel.
The S&P 500 fell 11.59 (-0.36%) to 3,214.97. The Dow fell 138.90 (-0.52%) to 26,731.20. And the Nasdaq fell 84.76 (-0.80%) to 10,465.73.
The American dollar remained weak on Friday amid gloomy coronavirus and unemployment outlook in the US. Over the weekend, finance officials from the G-20 vowed to continue using “all available policy tools” to fight the coronavirus pandemic and bolster the global economy, noting that the outlook remains highly uncertain.
EURUSD advanced against a weak dollar, while pound fell due to drag in Brexit talks and speculations of negative rates. Commodities remained within familiar levels. WTI settled a few cents above $40.00, not far from its June high. Gold finished the week with modest gains around $1,810 a troy ounce.
Written by;
Nnadi Victor
An Independent Economics Researcher