Terence Wu is an OCBC Bank FX strategist. He works in Singapore. He said that they are still left with hazy signals concerning the potential turn in broad dollar prospects.
There was a better-than-forecasted expansion in the Institute for Supply Management’s United States manufacturing index. Thus, it was a bright spot for the dollar overnight.
Nevertheless, it came with a warning. It was because output remains far below pre-virus levels. Moreover, the employment index was below expectations, at a still contractionary 44.3.
Alan Ruskin is a Chief international strategist in Deutsche Bank. He said that the recovery cannot accelerate with the virus still not under control in large segments of the global economy.
Moreover, they forecast much more sensitivity to the August data. This is because ‘the easy part’ of the bounce back from lockdowns is done.
Dollar and Other Currencies
Last week, the United States had a second straight week of slowing infections. Nevertheless, it was the fourth week in a row of rising deaths. It is because of new hotspots popping up in the States, as well as across the globe. All that information is according to Reuter’s analysis.
Australia’s second-biggest city of Melbourne announced fresh measures and curfew restrictions on movement to suppress an outbreak there. Meanwhile, the cases are on the march again in Europe.
On Tuesday, the Reserve Bank of Australia said in its policy statement that the recovery is likely to be both bumpy and uneven. He forecasted that Melbourne’s lockdown would push unemployment to about 10% later in the year from 7.4% in June.
Elsewhere, per dollar, the yen was stable at 106.04. Meanwhile, the pound hung on to most of the gains of July on the greenback at $1.3079. The New Zealand dollar was flat at $0.6612.
Tensions elevate for the relationship between the United States and China. Thus, in onshore trade, yuan kept on the weaker side of 7-per-dollar at 6.9806.