The Dollar drops; Euro strengthens in anticipation of the meeting Merkel/Macron

By Peter Nurse

The dollar fell on Monday in the beginning of the day in Europe, while the sentiment of traders continue to fluctuate between optimism about a global economic recovery and concern, the number of cases of coronavirus continues to rise.

At 9: 30, the dollar index, which tracks the greenback against a basket of six other currencies, fell by 0.2% to 97,170.

The EUR/USD rose 0.4 % to 1,1259, the GBP/USD rose 0.4 % to 1,2378, while the USD/JPY has declined 0.1 % to 107,11.

The world health Organization reported that about 190,000 new cases over a period of 24 hours up to Sunday morning, which is a new record. This means that the total number of cases of Covid-19 in the world has now exceeded the 10 million mark, with over 500,000 deaths recorded in the world.

America continues to be severely affected, with more than a quarter of all cases. A number of the most populous States, including California, Texas and Florida, have had to limit the opening of a number of companies, the cases amounting to a record level in the country.

“The recovery of the closures could delay the U.s. recovery,” said analysts at ING (AS:INGA) in a research note. “But we also know that Congress and the Fed have a trigger-happy when it comes to further stimulus.”

The economic data released around the world tend to suggest a rapid recovery. The profits of industrial enterprises increased for the first time in six months in may, while in the United States, retail sales rebounded sharply and economists are predicting that three million jobs will be created in June after a clash of 2.5 million a month earlier. In response, the yuan offshore has strengthened 0.2 % against the dollar.

The German chancellor Angela Merkel is to receive on Monday the French president Emmanuel Macron held interviews with the two leaders likely to discuss the strategy to employ in order to get an agreement on the stimulus funds for the region.

The hope of an answer united of the EU to the virus and a regional recovery quick has allowed the single currency to record gains of around 1.5% against the greenback since the beginning of the month.

The free trade negotiations between the EU and the Uk are set to resume this week in Brussels, while some signs of progress are observed.

“We expect to see little progress during the summer months, which will maintain uncertainty on growth and business prospects of the United Kingdom and will make the british pound one of the least-performing of the G10 in terms of exchange rates,” said ING.

The pound reached on Friday, its lowest level in over a month and fell 0.7 % over the last week, both against the u.s. dollar as compared to the single currency. The data on consumer credit and mortgages in the Uk are expected at 10.30 am.

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