By Peter Nurse
The american dollar is moderately adjusted at the beginning of the trading session european Thursday, reversing earlier losses, but the long-term outlook for the greenback continued publication of gradient.
At 9 a.m., the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.1% to 96,135. The EUR/USD fell 0.1% to 1,1398, the GBP/USD declined by 0.3% to 1,2544, and the USD/JPY remained stable at 106,92.
The continuing increase in the case of Covid-19 at the global level has helped the dollar Thursday, while a burst of localized epidemics in the world puts the total number of infections to 13.5 million and the number of deaths at about 600,000, according to data from the Johns Hopkins University.
China has reported a growth of 3.2 % of its GDP in the second quarter year-on-year, a sharp rebound after the contraction of 6.8 % in the first quarter, while the yuan is slightly weakened, the monthly data that showed a drop in surprising retail sales, which suggests continued weakness in consumer demand.
The trends of the global market more and more similar to a new relative rotation of the winners of the category “Stay-at-Home” (technology, USD) to the markets of the reflation (Dax, energy, EM FX), and not a fear of the growth of the world/US”, said the analysts of the Danske Bank in a research note.
“We continue to view the EUR/USD as part of this rotation,” added Danske. “With this in mind (and we have not even started to assess the optimism of a Brexit), we started to think that we can exceed our short-term goals of 1M and 3M at 1.15 on the EUR/USD pair.
The dollar index is expected to weaken to about 2% to 94.1 by the second quarter of next year, according to a survey of analysts compiled by Bloomberg.
In addition, the dollar index is weighted by the exchange of the Deutsche Bank (DE:DBKGn) tumbled more than 1 % this month, according to Bloomberg, and is expected to test the trend line in place since 2011, including a rupture would be an important signal for the holders of dollars.
The ECB will meet later on Thursday but it is unlikely that it offers another plan for easing so soon after the measures in June.
“We are expecting a repetition of recent comments from various members of the board of governors, which sets a tone cautiously optimistic compared to the projections in June,” said Danske.
Important us economic data are also expected later in the day on Thursday, with the inscriptions weekly jobless claims and retail sales for the month of June.