Foreign Exchange Update 6th July 2020

Foreign Exchange Update 6th July 2020

A fortnightly look at global financial markets by deVere Groups, Senior Investment Strategist Tom Elliott.

EUR/USD started the new week trading on the upside, moving closer to 1.13. The Euro edged higher last week but faces risks ahead of the EU recovery fund to be announced in the next few days. China promoting a bull market has also weighed heavily on the safe-haven greenback.

 The Pound-to-Dollar is trading higher, close to 1.25. The pair was seen rebounding sharply from June lows last week and could climb even further in the coming days. The risk-on sentiment is providing support for the Pound ahead of UK construction PMI data, as the Sterling put an end to three consecutive weeks of losses against the Dollar last week.

 GBP/EUR showed signs of stabilising, after facing Brexit-related worries. The Pound recovered from three-month lows against the Euro last week, and the charts are now pointing towards a further correction higher. The British currency neared the 1.09 mark against the Euro after being sold early last week but was testing 1.11 by Friday’s closing session after performing strongly alongside stock markets.

Elsewhere, the Pound-to-Canadian Dollar is at risk of falling to 1.6756 early this week ahead of a government spending review but is still in the chance of recovering solid ground. The Pound was seen climbing moderately against a slow Loonie last week, but the outlook for the pair depends widely on the result of Friday’s Brexit update.

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