On Wednesday, in early London trading, currency traders were broadly cautious. The Japanese yen saw its first session of gains in more than a week—all that was before publishing critical European and United States economic data.
Ahead of United States manufacturing data for June, the dollar rose overnight before erasing gains. It is forecasted to show a rebound in activity. On the day, at 0732 GMT, against a basket of currencies, the dollar was up by around 0.2% at 97.407.
ING strategists wrote, in a note to clients, that even if it is surprising on the upside, markets are likely to take the forward-looking indicator with caution. This is because, in the United States, Covid-19 cases are rising.
European economic data is also in focus. German unemployment data will be out at 0755 GMT, and eurozone manufacturing PMI will be out at 0800 GMT.
On the day, the euro was broadly flat at $1.12275.
ING strategists said that, in the FX market, there is now a generally calmer trend. Thus, the EUR/USD pair should stay around 1.1200 today.
Investors bet that the surge in new infections in the United States Southwest and South will not derail a broader global economic recovery.
On Tuesday, new United States COVID-19 cases rose by more than 47,000. This is according to a Reuters tally. The indicator is the most significant one-day spike since the start of the pandemic. Nevertheless, the top infectious disease expert of the US government said that number could soon double.
The United States is not among the countries in the safe list. From those countries, the bloc will allow non-essential travel from Wednesday. That is the decision of the European Union.
There will be a localized lockdown in the suburbs north of Melbourne in Australia of more than 300,000 people. This will start on Wednesday and will take a month.
This is the current news of the market.