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Bob Mason
Federal Reserve building with twenty dollar bill on grunge texture

Earlier in the Day:

It’s was a relatively quiet start to the day on the economic calendar. The Aussie Dollar was in action in the early part of the day.

Away from the economic calendar, COVID-19 and the U.S stimulus package remained in focus ahead of the FED.

Looking at the latest coronavirus numbers

According to figures at the time of writing, the number of new coronavirus cases rose by 241,391 to 16,883,654 on Tuesday. On Monday, the number of new cases had risen by 229,469. The daily increase was higher than Monday’s rise and up from 240,565 new cases from the previous Tuesday.

Germany, Italy, and Spain reported 2,602 new cases on Tuesday, which was down from 7,167 new cases on Monday. On the previous Tuesday, 1,889 new cases had been reported.

From the U.S, the total number of cases rose by 64,799 to 4,498,209 on Tuesday. On Monday, the total number of cases had increased by 61,571. On Monday, 21st July, a total of 67,140 new cases had been reported.

For the Aussie Dollar

2nd quarter inflation figures were in focus in the early part of the day.

The annual rate of inflation came in at -0.3%, which was marginally better than a forecasted -0.4%. In the 1st quarter, the annual rate of inflation had stood at 2.20%. In the 1st quarter, the annual rate of inflation had accelerated from 1.8% to 2.20%. Quarter-on-quarter, consumer prices fell by 1.90%, following a 0.3% rise in the 1st quarter. Economists had forecast a 2.00% slide.

According to the ABS,

  • The June quarter slide was attributed to free child care (-95%), sliding automotive fuel prices (-19.3%), and a fall in pre-school and primary education prices (-16.2%). Excluding these, consumer prices would have risen by 0.1%.
  • Cleansing and maintenance price rose by 6.2%, with non-durable household products up by 4.5%.
  • There were also increases in prices for furniture (+3.8%), major household appliances (+3.0%), and audio, visual, and computing equipment (+1.8%).
  • In the June quarter, the quarter-on-quarter decline was the largest in the 72-year history of the CPI.
  • It was only the 3rd time since 1949 that the annual rate of inflation had turned negative.

The Aussie Dollar moved from $0.71645 to $0.71575 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.04% to $0.71575.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.03% to ¥105.14 against the U.S Dollar, with the Kiwi Dollar down by 0.11% to $0.6654.

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The Day Ahead:

For the EUR

It’s another particularly quiet day ahead on the economic calendar. There are no material stats from the Eurozone to provide the EUR with direction.

The lack of stats will leave the EUR in the hands of COVID-19 updates and geopolitics. Late in the day, the FED is also in action later in the day.

From the U.S, the continued spike in new COVID-19 cases has weighed heavily on the Dollar. Any 2nd wave hitting EU member states beyond Spain would be a test the EUR.

At the time of writing, the EUR was up by 0.03% to $1.1720.

For the Pound

It’s yet another particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats will continue to leave the Pound in the hands of Brexit and market risk sentiment.

At the time of writing, the Pound was down by 0.11% to $1.2918.

Across the Pond

It’s another relatively busy day ahead for the U.S Dollar. June pending home sales and goods trade figures are due out later today.

The stats will likely have a muted impact on the Dollar and risk sentiment, however. For the Dollar and the broader market, the FOMC monetary policy decision and press conference is the main event.

Away from the calendar, the U.S stimulus package, tensions between the U.S and China, and COVID-19 will remain in focus.

At the time of writing, the Dollar Spot Index was up by 0.10% to 93.788.

For the Loonie

It’s another particularly quiet day ahead on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

A lack of stats will leave the Loonie in the hands of the weekly EIA crude oil inventory numbers and market risk sentiment.

The key to the U.S economy and its trading partners is the passing of the latest COVID-19 stimulus package. Any further delays would further limit the upside in the Loonie.

At the time of writing, the Loonie was down by 0.01% to C$1.3381 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

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