Economic Data, COVID-19, and Trump to Put the Greenback in the Spotlight

Bob Mason
5 min read
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Earlier in the Day:

It was another relatively quiet start to the day on the economic calendar on Friday. The Japanese Yen was in action in the early part of the day.

Away from the stats, Thursday’s rise in new COVID-19 cases globally and in the U.S was of concern.

With little else for the markets to consider through the remainder of the Asian session, geopolitics will also be a concern. Following Thursday’s spike in new cases in the U.S, the U.S administration may look to deliver a distraction for voters.

Looking at the latest coronavirus numbers

On Thursday, the number of new coronavirus cases rose by 193,646 to 9,697,910. On Wednesday, the number of new cases had risen by 174,860. The daily increase was higher than Wednesday’s rise and 169,995 new cases from the previous Wednesday.

Germany, Italy, and Spain reported 1,264 new cases on Thursday, which was down from 1,463 new cases on Wednesday. On the previous Thursday, just 787 new cases had been reported.

From the U.S, the total number of cases rose by 42,480 to 2,501,653 on Thursday. On Wednesday, the total number of cases had risen by 38,253. On Thursday, 18th June, a total of 25,576 new cases had been reported.

For the Japanese Yen

In June, the Ku-area of Tokyo saw inflationary pressures remain, with the annual core rate of inflation holding steady at 0.20%. In May, core consumer prices had also risen by 0.20%, year-on-year.

According to the Ministry of Internal Affairs and Communication.

  • Rising prices for clothes and footwear (+2.2%), furniture and household utensils (+1.5%), and medical care (+1.1%) provided support.

  • There were also increases in prices for transportation & communication (+0.9%), culture & recreation (+0.8%), and housing (+0.6%).

  • A 10.2% slide in prices for education and a 1.4% fall in prices for fuel, light, & water charges partially offset rises from elsewhere.

The Japanese Yen moved from ¥107.183 to ¥107.174 upon release of the figures. At the time of writing, the Japanese Yen was flat at ¥107.19 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar down by 0.09% to $0.6881, with the Kiwi Dollar down by 0.08% to $0.6424.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction.

A lack of stats will leave the EUR in the hands of chatter from Washington and COVID-19 news and updates.

Expect any further spike in new cases or any further talk of tariffs on the EU to weigh on the EUR.

At the time of writing, the EUR was down by 0.01% to $1.1217.

For the Pound

It’s also a particularly quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

Brexit, the threat of tariffs, and the risk of a 2nd wave COVID-19 pandemic are the key risks to the Pound.

Any negative chatter would bring $1.23 levels back into play.

At the time of writing, the Pound was up by 0.02% to $1.2421.

Across the Pond

It’s another busy day ahead on the U.S economic calendar. Key stats include May’s personal spending and FED’s preferred inflation figures.  Finalized consumer sentiment figures for June are also due out late in the day.

Barring a downward revision to prelims, we would expect today’s stats to have a muted impact on risk sentiment and the Dollar, however.

It’s Friday and Trump’s Twitter account has a tendency to get active at the end of the week. There’s a possible further breakdown of U.S – China relations and tariffs on French, German, Spanish, and UK goods to spook the markets.

We can also expect plenty of influence from the day’s COVID-19 numbers on the day and commentary from U.S states.

At the time of writing, the Dollar Spot Index was down by 0.02% to 97.410.

For the Loonie

It’s another quiet day ahead on the calendar. There are no material stats due out of Canada to provide the Loonie with direction.

A lack of stats will continue to leave the Loonie in the hands of COVID-19 updates and market risk appetite in general.

The latest spike in new COVID-19 cases has made the threat of a 2nd wave all the more real. Expect more negative reports to weigh on both crude and the Loonie.

At the time of writing, the Loonie was flat at C$1.3638 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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