FX & market recap:
Canadians holidayed on Wednesday; Americans got sick. There were 52,788 new coronavirus cases reported as California, Texas, Arizona, North Carolina, and Georgia broke single-day records.
Wall Street traders didn’t care. The DJIA closed flat, but the S&P 500 and NASDAQ finished with gains. Tesla (TELA: Nasdaq) closed the day with an astounding market cap of $207.66 billion. The company is worth more than Ford, GM, BMW, Honda, VW, and Ferrari, COMBINED.
Asia equity markets closed with gains. European bourses are higher with Spain’s IBEX index (up 1.87%) leading the pack higher. S&P 500 futures reversed Asia losses and are up 0.56%, in early NY trading. Talk of a potential COVID-19 vaccine, and the ongoing Asia and European economy reopening’s, are supporting positive risk sentiment. Fed Chair Powell’s Congressional testimony and the FOMC minutes were non-events.
Canadian dollar highlights:
USD/CAD plunged from 1.3700 on Tuesday to 1.3545 yesterday on the back of higher oil prices and lingering month-end portfolio rebalancing flows then bounced in overnight trading. Price action will track US dollar moves, which will be dictated by today’s US data dump, and global risk sentiment.
EUR/USD bottomed out at 1.1190 in NY yesterday morning, and climbed steadily, closing at 1.1251. Price action was steady in Asia. Better than expected Eurozone unemployment news, improving Producer Price data, combined with Wednesday’s better than expected Eurozone and German PMI reports, fuelled the gains. EUR/USD technicals are bullish. The failure to break support at 1.1170, followed by the breach of resistance at 1.1270, targets further increases to 1.1360.
British pound highlights:
GBP/USD probed support in the 1.2260 area Tuesday and when it failed to break, rallied hard. Since then, GBP/USD climbed steadily, reaching 1.2526 just before NY opened today. The gains were fuelled by improved risk sentiment due to chatter of a COVID-19 vaccine, UK PMI data, and a jump in US June ISM Manufacturing PMI (actual 52.6 vs May 43.1). The GBP/USD technicals turned bullish with the break above 1.2420 targeting 1.2675.
Asia Pacific highlights:
USD/JPY peaked at 108.13 Tuesday, then dropped to 107.35 in NY yesterday, before consolidating in a 107.35-107.55 range. Improved risk sentiment and higher US Treasury yields are underpinning prices. Meanwhile AUD/USD and NZD/USD rallied on the back of hopes for a global economic rebound as Asia and European economies reopen.