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The Euro was unable to secure further gains ahead of the New York open and retreated back below the 1.1350 level with some further disappointment over the German export data. There was no evidence of a progress towards agreement on the EU recovery fund which limited overall Euro support.

Overall confidence in the Euro-area coronavirus management, however, continued to underpin overall single-currency confidence, although uncertainty dominated.

US initial jobless claims declined to 1.31mn in the latest week from 1.41mn previously which was below consensus forecasts of 1.40mn and the lowest reading for 15 weeks. Continuing claims also declined sharply, but there was an increase in both metrics when the number of employees on emergency Federal programmes is added in. The data maintained underlying market uncertainty over underlying labour-market trends and contributed to overall uncertainty surrounding overall dollar sentiment.

Overall risk conditions were less confident in New York which triggered an element of defensive demand for the dollar and the Euro dipped to below the 1.1300 level as commodity currencies also lost traction. The Chinese yuan held firm, however, which limited potential Euro selling as overall uncertainty increased. There was a similar pattern on Friday with a more defensive global risk tone protecting the US dollar as the Euro retreated to the 1.1270 area amid pre-weekend position adjustment. 


The dollar and yen again tended to drift in tight ranges ahead of the Wall Street open. Equities moved lower as US coronavirus concerns increased again and the yen secured some support with the dollar weakening to July lows near 107.10. Markets, however, were still unable to secure a decisive break and the pair settled around 107.25 at the European close with mixed trends on Wall Street.

Florida reported a slowdown in the number of new cases, but the number of deaths increased and underlying confidence in the situation remained very fragile, especially with Texas reporting a record increase in deaths. Overall US cases also increased over 60,000 on the day for the second time this week. White House coronavirus taskforce member Fauci, was optimistic that there would be a vaccine by the end of 2020 or early 2021 which provided some relief.

The US Supreme Court ruled that a New York grand jury can access Trump’s financial records, but they will not be released to the House of Representatives, maintaining political uncertainty. There was further debate over unemployment benefits with Treasury Secretary Mnuchin stating that benefits would be reduced from the end of July to provide incentives. Equities rallied late in the session, but the dollar was held around 107.20.

Asian equities moved lower amid a more cautious tone and risk appetite was more fragile with the yen gaining fresh support. Chinese equities moved lower with reports that large funds were selling and the dollar dipped below the 107.00 level as the yen made gains on the crosses.


Sterling secured fresh gains on Thursday with markets assuming the Chancellor’s economic support package would lessen the risks of a fresh downturn in the UK economy. Overall risk appetite initially held firm with the UK currency strengthening to 3-week highs near 1.2670 against the dollar while the Euro also moved lower to the 0.8950 area. Following the latest round of EU/UK talks, EU chief negotiator Barnier stated that there were still significant divergences between the two sides. He stated that he would continue to work with patience, respect and determination. The overall impact was limited with markets taking note of recent evidence which suggested that there was scope for compromise. Talks will continue next week in Brussels with rhetoric monitored very closely.

Sterling edged lower as risk appetite dipped and the dollar regained ground, although Sterling was supported on valuation grounds.

The government announced that there would be a further easing of lockdown restrictions in the leisure sector in England and the easing of quarantine rules will come into effect on Friday. The Euro was unable to regain ground and settled around 0.8950 while a firmer dollar pushed the UK currency below 1.2600 on Friday. 


The Euro was unable to make significant headway on Thursday as the franc again demonstrated resilience. The Swiss currency also gained net support when equities moved lower. The single currency retreated to the 1.0615 area while the dollar remained trapped just below 0.9400.

Underlying confidence in other major currencies remained fragile which important in curbing any potential franc selling. Risk conditions remained more fragile on Friday which provided further franc support as markets remained uneasy over global coronavirus trends and the Euro was held around 1.0615 as equities dipped.



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