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Mixed US Dollar Performance to Start the Trading Week

Posted: Monday, July 20th, 2020

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The trading week started with mixed performance for the USD, due to lack of important economic data out of the United States. At the beginning of the New York session, the EUR depreciated the most versus the USD, while the GBP rose across the dashboard – a mixed US Dollar performance.

The net winner? The EURGBP cross, as it dipped over a hundred pips points in the first trading day of the week.

US Dollar Performance

The Pound Stealing the Show

It was supposed to be the Euro’s week. Last Friday, the EU Summit began in Brussel, with the aim of restructuring the Recovery Fund. The discussion centers on how much of the EUR750 billion of the funds to fight coronavirus should be loans vs. grants.

As such, the Euro traded with a bid tone the entire last week. Last Monday, for example, it was EURUSD and EURGBP that outperformed. Moreover, all Euro pairs ended the previous trading week on a high note.

But as the weekend progressed, the summit negotiations did not. Mixed signals from Brussels caused tight ranges on the Euro pairs. Therefore, the earlier USD gains seen in the European session were quickly reversed at the start of the American session.

The Great Britain Pound (GBP) stole the show. It jumped on the news that a COVID-19 vaccine produced by Oxford University shows promising results.

Everything GBP-related appreciated in value today. From the GBPUSD major pair to the GBPCHF or EURGBP cross, the GBP took no prisoners.

Q2 2020 Earnings Season to Influence the US Dollar Performance

The rest of the trading week is poor in important economic data capable of influencing the currency market visibly. Because of that, investors’ focus remains on the stock market performance and the earnings releases this week. In particular, Tesla Q2 2020 earnings present significant importance due to many retail trading accounts invested in the electrical cars company.

The upcoming Asian session may be of importance to Aussie traders. The Reserve Bank of Australia (RBA) is due to release its monetary policy meeting minutes, and the AUD pairs may react quickly.

During the coronavirus health crisis, the Australian Dollar (AUD) was one of the best performers. After the initial shock that sent the AUDUSD pair to 0.55, it recovered to the current 0.7 level. Fueled by a flamboyant stock market and a solid response from the RBA, the Aussie dollar outperformed in the second quarter.

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