The euro slumped on Thursday following the European Central Bank’s (ECB) latest interest rate decision.
This was driven primarily by the ongoing resurgence of coronavirus cases in many parts of the world, amid concerns about the potential impact on the global economic recovery.
Demand for the US dollar then spiked on Tuesday with the publication of the US consumer price index, which smashed expectations by reporting domestic inflation accelerated to 5.4% in June, stoking speculation over the timing of the Federal Reserve’s next rate hike.
However, this speculation was quickly quelled by Fed Chair Jerome Powell, who undermined the US dollar in mid-week trade as he told Congress that the US economy is ‘still a ways off’ the point at which the Fed can begin tapering its stimulus measures.
But this pullback in the US dollar didn’t last for long, with USD exchange rates accelerating again through the latter half of the week amidst ongoing coronavirus concerns and some positive US data.
Turning to this week’s session, in the absence of any major US data releases it is likely we will see the direction of USD exchange rates largely determined by market sentiment, which could see the US dollar remain well supported as a risk-off mood looks to prevail as a result of ongoing global coronavirus concerns.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)