{"id":173742,"date":"2020-07-16T07:58:03","date_gmt":"2020-07-16T11:58:03","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=173742"},"modified":"2020-07-16T07:46:27","modified_gmt":"2020-07-16T11:46:27","slug":"dollar-to-be-depressed-over-rosier-global-economic-outlook","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/07\/dollar-to-be-depressed-over-rosier-global-economic-outlook\/","title":{"rendered":"Dollar to be depressed over rosier global economic outlook?"},"content":{"rendered":"
July 16, 2020<\/div>
\r\n<\/div><\/div>

By Han Tan, Market Analyst, ForexTime<\/a><\/strong><\/p>\n

\n
\n
\n
\n

The Dollar will be on focus as investors digest a slew of fresh insights into the state of the global economy.<\/p>\n

\"\"<\/p>\n

The Dollar Index\u2019s (DXY) support level at 95.7 has proven its worth for the time being, as prices rebounded off that line like it did in June, to climb back up towards the 96.0 psychological level at the time of writing. However, should markets feel more optimistic about the world\u2019s ability to recover from the pandemic, based on today\u2019s economic releases, a sustained presence below 95.7 could eventually carve a path towards the next support level at 94.6 on the daily timeframe.<\/p>\n

Meanwhile, China is showing the world its way past the economic pains of the pandemic.<\/p>\n

In the second quarter, the world\u2019s second largest economy posted a positive surprise with a stellar 3.2 percent year-on-year expansion, which exceeded market expectations, while also standing in stark contrast to the 6.8 percent year-on-year contraction in the first three months of 2020. China\u2019s June industrial production climbed by 4.8 percent, in line with market forecasts. However, domestic demand has yet to find a firm footing, as June\u2019s retail sales contracted by 1.8 percent. Still, the retail sales data suggests that the worst is now over, and domestic consumption should eventually be restored to growth, aided by the support from policymakers.<\/p>\n

Global investors will next turn their attentions to the European Central Bank\u2019s meeting today. While the ECB is not expected to make any major adjustments to its policy settings, its conveyed outlook on the continent\u2019s economy however could have a major say on\u00a0market sentiment, perhaps even feeding into\u00a0the Dollar index\u2019s performance. Keep in mind that the Euro accounts for 57.6 percent of the Dollar index, which means the Euro holds a large sway over DXY.<\/p>\n

The US weekly jobless claims, which have taken on greater significance amidst the pandemic, is set to emphasize the plateauing recovery in the US jobs market. To be clear, there have been very encouraging but nascent signs that the world\u2019s largest economy is slowly finding its feet in the post-pandemic era, from the non-farm payrolls reports of the past two months, to yesterday\u2019s better-than-expected June industrial production data.<\/p>\n

Still, investors will need a steady flow of positive economic readings, including from today\u2019s jobless claims figures and US June retail sales, in order to justify further gains in riskier assets, at least from a fundamental perspective. Although US equity futures are edging lower at the time of writing, either the economic data announcements or the Wall Street earnings releases today have the ability to push risk sentiment higher, potentially at the expense of the Greenback.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n<\/div>\n

\n

\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Han Tan, Market Analyst, ForexTime The Dollar will be on focus as investors digest a slew of fresh insights into the state of the global economy. The Dollar Index\u2019s (DXY) support level at 95.7 has proven its worth for the time being, as prices rebounded off that line like it did in June, to […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-173742","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/173742","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=173742"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/173742\/revisions"}],"predecessor-version":[{"id":173751,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/173742\/revisions\/173751"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=173742"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=173742"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=173742"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}