© Reuters PHOTO PHOTO: Four Thousand US Dollars Calculated From Banker To Bank In Westminster
By Wayne Cole
SYDNEY (Reuters) – The US dollar is trying to hold a rare rally together on Monday as its longest losing streak in a decade left much of the short-lived structural currency market vulnerable to a push for any optimistic news.
The bears were caught by a better payroll report on Friday, which pushed Treasury yields higher into this week’s massive $ 112 billion debt sale. However, the dollar ended even lower for the seventh week in a row.
“Our portfolio has been positioned for a few weeks now for a slightly weaker USD due to the independent growth of COVID-19 infections in the US which has opened a good gap in near-term economic performance, especially against Europe.” , analysts at JPMorgan (NYSE 🙂 said in a note.
“Our positions are focused on the euro bloc, also reflecting the structural improvement in the European policy framework following the agreement on the recovery fund.”
The euro hit $ 1.1791 on Monday, after hitting a two-year high of $ 1.1915 last week, which now acts as a major resistance. Support comes in at around $ 1.1755 and $ 1.1694.
Circulation was easy with Tokyo on a holiday and considerable uncertainty as to whether U.S. policymakers could agree on a new fiscal support package for the virus-hit economy.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin said Sunday they were open to resuming COVID-19 aid talks after President Donald Trump took executive action on unemployment benefits.
Against a basket of currencies, the dollar was a stronger fraction at 93,339 and slightly more than a two-year current.
The dollar was slightly more stable in the yen at 105.75, much higher than the last level of 104.17, but in the face of sharp resistance at 106.46.
Investors were wary of a new spark in Sino-US tensions with trade talks scheduled for Aug. 15 even as Washington imposed sanctions on Hong Kong and senior Chinese officials.
Breakdo breaks in negotiations would tend to benefit the dollar, and the sheltered Swiss franc, at the expense of the Japanese yen and commodities such as the Australian dollar.
On the data front, the United States has consumer prices on Wednesday and retail sales on Friday, which is expected to show a strong bounce in spending albeit before the last round of social restrictions takes some steam out of the economy.
A series of Chinese figures will have this week, which is projected to show a steady recovery, while EU production data is also expected to be satisfactory.
The data showed that China’s plant deflation eased in July, driven by rising global oil prices and as industrial activity climbed to pre-coronavirus levels.
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