Like many websites, we use cookies for statistical purposes and to acquire information on general internet use. This helps ensure that you get the full benefit of our services, and enhances your browsing experience . For more details on the cookies we use, view our privacy policy. By using this website, we'll assume that you're happy to receive all cookies from CWG Markets .
Removing cookies may impede the operation of some parts of this website. For general information about cookies and how to remove them, please click here.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
OK, I agree

The dollar was abandoned by the market

24 Jul, 2020

Euro and gold soared

Data and news released yesterday:

On July 24th, the number of confirmed cases in the US exceeded 4 million 20 thousand, reaching 4,028,741, and the number of deaths exceeded 140 thousand cases, reaching 144,072. The average number of new cases of coronavirus infection in the United States exceeds 2,600 per hour, the highest in the world.

The U.S. initial jobless claims data showed that the number of new jobless claims increased from 109,000 last week to 1,416,000, the first increase since the end of March, slightly higher than the expected 1.3 million people, ending months of decline.

The U.S. national economic adviser, Kudrow, still believes that the United States is in a self-sustaining recovery, and the economy is still in a "V-shaped recovery".

The U.S. stock market fell to its lowest level in a week, and the number of people applying for unemployment benefits for the first time increased unexpectedly last week, raising concerns that the economic recovery may have stalled.

The European Central Bank: the economic recovery of the euro area is slow and shows imbalance among various sectors and countries, which requires a high degree of monetary easing.

The negotiation between the UK and the EU on the future relationship between the two sides has reached an impasse, and the expected time for reaching an agreement is still a few weeks away. However, both sides have not shown the willingness to make major concessions.

 

Market Volatility:

The US dollar fell to a lowest position in recent two years, and the US dollar index fell 0.19% to around 94.78, which reached the lowest level since the end of September 2018. Under the influence of the news, the US dollar briefly strengthened.

The euro rose 0.22% to close at around 1.1596, hitting a 21-month highest level of about 1.1627 earlier in the session, rising to its highest level since early October 2018, and rising against the US dollar for the fifth consecutive trading day.

The pound was stable and closed at around 1.2740, with a drop of 80 points in the session. As both the UK and the EU are pessimistic about the progress of the negotiations, the chief representative of the EU's Brexit talks, said that the Brexit trade talks were "still far away".

The USD/JPY fell 0.27% to around 106.86; the U.S. dollar and the Japanese yen are still affected by risk sentiment, moving forward and retreating together, and their volatility space is still narrow.

The spot gold rose to a new highest position of US $1898.34/oz since September 2011, as the US dollar weakened and more stimulus measures were expected to be introduced to revive the economy hit by the epidemic.

The WTI September crude oil futures fell by US $0.83, or 1.98%, to US $41.07/barrel; Brent's September crude oil futures fell by US $0.98, or 2.21%, to US $43.31/barrel.

 

Future forecast of CWG:

In the Asian session of this trading day, the Tokyo Stock Exchange of Japan will be closed for one day because of the sports festival; in the European market, the retail sales of the UK will be released after the adjustment of June, and then the purchasing managers' index of manufacturing industry in France, Germany and the euro area will be successively released; in the US session, the initial value of Markit manufacturing and service industry purchasing manager index in July and new house sales in June will be released in the United States.

Institutional Analysis: StoneX said in its quarterly outlook that the bullish trend is pushing the gold price closer and closer to US $1900 per ounce, and the gold price is expected to climb to a record high in the third quarter; the gold market in the second quarter has a stable bottom, and the future market will further rise, and the gold price is expected to reach a record high in the third quarter. After the shock in the first quarter, the market calmed down a little in the second quarter, while gold rose steadily, laying the foundation for further rise. It is obviously possible for the gold price to hit 1900 before the end of the year, or even higher.

 

Financial calendar:

Tokyo stock exchange closed for a sports day

Economic data:

14:00 Retail sales in UK June after adjustment

15:15 initial value of Markit / CDAF Manufacturing Purchasing Managers Index in France in July

15: 30 initial value of Markit / BME Manufacturing Purchasing Managers Index in Germany in July

16:00 Initial value of Markit Manufacturing Purchasing Managers Index in July

16:30 initial value of Markit / CIPS Manufacturing Purchasing Managers Index in UK in July

21:45 initial value of Markit manufacturing and service purchasing managers index in July

22:00 new home sales in June

Central Bank News:

18: 30 Central Bank of Russia announces interest rate resolution

20: Russian Central Bank President Nabiullina held a press conference

 

CWG financial knowledge:

New home sales in the United States (annualized monthly rate): the U.S. Department of Commerce announced that new home sales data occupy an important position in the sales category, which directly reflects the prosperity of the real estate market. New home sales in the United States only include sales of new single family houses, and sales data of multi-unit houses are not included in the calculation of this data. If the published data is better than expected, it will be good for the US dollar; otherwise, it will be negative for the US dollar.