Dollar starts week on back foot ahead of data, earnings
By Administrator_India
The U.S. dollar edged down in Asian trade on Monday as investors looked to looming economic data from around the world and U.S. corporate earnings to gauge whether the markets’ guarded optimism on the economic outlook is justified.
The greenback had ended its third week of losses on Friday as investors bought into risk-sensitive currencies on bets that the worst of the pandemic’s sweeping impact was over.
The dollar index against a basket of major currencies slipped 0.2% in early Monday trade to 96.452.
U.S. coronavirus cases surged over the weekend, as Florida reported an increase of more than 15,000 new cases in 24 hours, a record for any state, surpassing a peak hit in New York in April.
Hopes for development of drugs and vaccines for the disease are also supporting risk sentiment as do economic indicators that have so far shown a recovery from lockdowns.
A weekly gauge of consumer confidence in Australia has dropped after a spike in infections in Melbourne and that could be echoed in the United States, where the magnitude of the outbreak is much larger.
U.S. consumer inflation figures for June are due on Tuesday while retail sales, a key gauge of consumption, are released on Thursday.
The U.S. corporate earning season will start this week, providing another window to assess the scale of the damage as well as the recovery, from the pandemic.
The euro rose 0.25% to $1.1329, maintaining its slow uptrend since late last month.
Looming large for the common currency was a planned EU summit on July 17-18, where leaders need to bridge gaps on long-term budget and economic stimulus plans.
European Council President Charles Michel proposed a smaller joint EU budget for 2021-27 than previously envisaged to placate thrifty countries in the north.
The British pound also gained 0.3% to $1.2656, edging near its three-week high of $1.2668 touched last week.
The Australian dollar added 0.3% to $0.6969.
The dollar also lost small ground against the safe-haven yen, to 106.83 yen, staying near two-week lows of 106.635 set on Friday.
Investors also looked to China, where economic recovery is gaining momentum as the outbreak has largely been contained.
China will release its June trade data on Tuesday and a batch of other data, including second quarter GDP, on Thursday.
The Chinese yuan gained 0.15% to 6.9987 per dollar in early trade.
