August 16, 2021

What Happens To Major Currencies In The European Session?

 Entering the European session, most major currencies returned to gains after trading gloomily in the Asian session after being disappointed by growth in slowing economic data from China.

China reported a slower increase in industrial production and retail sales in July, raising market concerns over a global economic recovery amid a resurgence of coronavirus outbreaks around the world.

This caused the US dollar to gain some temporary support as a safe-haven, before demand for the king of the currency faltered again in the European session following weak US 10-year bond yields.

At the time of writing, the dollar index that measures the strength of the greenback dollar against a basket of major currencies is trading at 92.55.

The Aussie dollar was among the worst -hit currencies following the data, coupled with poor developments on the coronavirus outbreak in Australia, leading to the extension of some sanctions.

The publication of the minutes report of the Reserve Bank of Australia (RBA) meeting early Tuesday morning will be the focus of the market, after the central bank maintained plans to continue reducing bond purchases from early September.

Meanwhile, the pound traded hovering around 1.3850 against the US dollar as the number of coronavirus cases in the UK again showed an increase. UK health experts warned on Saturday that the country would see a surge in coronavirus cases this week.

Concerns over the rise in the Covid-19 case also brought safe-haven trading of the yen higher against most major currencies. In the Asian session, investors were also shown a better -than -expected reading of Japanese economic growth data with an increase of 0.3% in the second quarter of this year.