Price action was mixed for the Greenback this week, and ultimately, a net losing campaign for USD bulls. It was battle between COVID-19 headlines, Fed speak, and improving U.S. economic data that had traders bouncing back and forth all week.
United States Headlines and Economic data
Monday:
California to close indoor restaurants, movie theaters and bars statewide as coronavirus cases rise
U.S. economic growth is slowing down, Dallas Fed’s Kaplan says
Monthly U.S. budget deficit soared to record $864B in June
Strong bounce higher for the Greenback during the U.S. session as risk sentiment moved negative, reaction to the news of California closing a variety of businesses back down.
Tuesday:
U.S. consumer price index rose by 0.6% in June vs. 0.5% expected
Fed’s Bullard says stock market’s optimism has been proven right, so far
Fed’s Harker says U.S. economic downturn is painful and ‘stubbornly long-lasting’
Fed’s Brainard, eyeing weak recovery, says new policy tools may be needed
Trump signed law slapping sanctions on China for interference in Hong Kong
Risk sentiment was swinging positive for the session, this time on positive equity earnings headlines (Dow rises for a third straight day, rallies more than 500 points as Caterpillar leads), over shadowing negative geopolitical news (Trump “not interested” in Phase 2 trade talks with China) and accelerating virus cases growth.
Wednesday:
July Empire state index in positive territory for first time since pandemic began
US industrial production surges 5.4% in June
Fed’s Harker backs allowing economy to run hot before raising interest rates
Jump in Early-Stage Delinquencies Leads to Highest Overall Delinquency Rate in Over Four Years
Fed’s Beige Book sees increase in economic activity but nothing near pre-pandemic levels
Thursday:
U.S. Weekly jobless claims rise by more than 1 million for 16th straight week
Philly Fed manufacturing index retreats to 24.1 in July from prior month’s 27.5
U.S. Homebuilder sentiment jumps back to pre-coronavirus pandemic high
U.S. retail sales increased a better-than-expected 7.5% in June.
U.S. Business Inventories were down -2.3% m/m in May, -4.8% y/y
We saw a uniform move lower in USD against the majors, likely a reaction to the net negative round of U.S. economic updates seen above.
Friday:
U.S. homebuilding surges as coronavirus crisis sparks flight to suburbs, rural areas
University of Michigan Preliminary Consumer Sentiment for July 2020: 73.2 vs. 78.1 in June
U.S. reports 77,200 new coronavirus cases, shattering one-day record
Another round of USD selling into the weekend, possibly a reaction to some combination of the rising COVID-19 cases headlines, the disappointing consumer sentiment data, and/or some risk-on vibes sparked by positive comments from the Director of the National Institute of Allergy and Infectious Diseases (Dr. Fauci is optimistic we’ll see COVID vaccine breakthroughs by early Fall).