ForexLive European FX news wrap: Dollar recoups losses; month-end trading in focus

Author: Justin Low | Category: News

Forex news from the European trading session - 31 July 2020

Headlines:

Markets:

  • GBP leads, NZD lags on the day
  • European equities higher; E-minis up 0.3%
  • US 10-year yields down 0.5 bps to 0.541%
  • Gold up 0.8% to $1,972.00
  • WTI up 0.8% to $40.22
  • Bitcoin flat at $11,161

EOD 31-07
The major headlines were about the record slump in the euro area economy in Q2, with Italy notably seeing its economic activity wiped out all the way back to 27 (!) years ago.

But the decline was very much expected with the market having long ago moved on from this and keeping focus on the pace of the economic recovery instead.

The dollar started on the back foot but managed to gain ground on the session, paring losses and is pushing towards the highs for the day ahead of North American trading.

USD/JPY recovered from 104.20 to 104.90 levels now while EUR/USD slumped from 1.1900 to 1.1830 during the session. The pound stayed more resilient though, with EUR/GBP nudging back towards 0.9000 as cable kept above 1.3100 for the most part.

Despite the choppy price action, it is all about month-end trading ahead of the weekend and we are likely only to get more clarity in terms of actual trading direction next week.

The virus situation in Europe and the UK is starting to rear its ugly head again, with the case count in Japan also set to break another daily record.

It will be interesting to see how much of that will weigh on global growth expectations after we move on from the earnings beat from key tech giants yesterday and month-end trading in general today.

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