Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Forex - Dollar Drops; Euro, Sterling Gain on Summit Agreement

ForexJul 21, 2020 07:43
Saved. See Saved Items.
This article has already been saved in your Saved Items

By Peter Nurse - The dollar has been under pressure Tuesday, with the euro and commodity currencies benefiting from the news that European Union leaders have reached an agreement over a recovery fund for the region and amid renewed hopes for a Covid-19 vaccine.

 At 2:45 AM ET (0645 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 95.718, having earlier traded at a more than four-month low of 95.687.

 Elsewhere, USD/JPY was up 0.1% at 107.31, while EUR/USD was flat at 1.1444, having earlier hit a four-month high of 1.1469.

 In the commodity currencies, NZD/USD inched higher and AUD/USD added 0.4% to 0.7039.

After more than four days of haggling, European Union leaders reached a deal on a massive 750 billion euro stimulus plan for their coronavirus-hit economies, with 390 billion euros as non-repayable grants - down from 500 billion originally proposed - and the rest in repayable loans.

“Investors are likely to scrutinize the package to look for the finer details such as the resulting distribution and the share of loans versus grants among member states,” said analysts at Danske Bank, in a research note.

“Although an agreement has been reached, we do not expect any major moves as the price action yesterday suggested that a lot has already been priced in.”

Adding to the weakness for safe havens like the dollar was encouraging data from trials of three potential COVID-19 vaccines, including a closely-watched candidate from Oxford University.

This comes as the number of coronavirus infections world wide climbed above 14.7 million, with over 609,000 deaths, according to the latest data from Johns Hopkins University.

Another currency showing strength Tuesday has been sterling, helped by the positive news from the EU summit as well as ahead of fresh Brexit talks beginning later Tuesday.

The aim of reaching an agreement between Britain and the EU on future ties by October is ambitious but achievable, German Foreign Minister Heiko Maas said on Tuesday.

“There is sizeable room for more stress to be built into sterling in the coming weeks and months as EU-UK negotiations enter a crucial phase – but we remain positive a trade deal will eventually be agreed on,” said analysts at ING, in a research note.

At 2:45 AM, GBP/USD traded 0.2% higher at 1.2687, just off the one month high of 1.2693 hit earlier, while EUR/GBP dropped 0.2% at 0.9018, close to the week low of 0.9015.


Forex - Dollar Drops; Euro, Sterling Gain on Summit Agreement

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email