NEW YORK, July 14 — The dollar edged lower yesterday as investors looked to US corporate earnings and upcoming retail data to gauge whether guarded optimism on the economic outlook was justified.
The index that measures the safe-haven dollar against a basket of six other major currencies pared early losses to end the session just 0.07 per cent lower at 96.538.
The dollar ended its third week of losses on Friday as investors bought into risk-sensitive currencies on bets that the worst of the pandemic’s sweeping impact was over.
But yesterday afternoon, California Governor Gavin Newsom ordered a massive retrenchment of the state’s optimistic reopening, shutting bars and banning indoor restaurant dining statewide and closing churches, gyms and hair salons in hardest-hit counties.
The dollar regained ground after the news out of California, which sent riskier assets like US stocks lower. The S&P 500 index was last down 0.95 per cent. The major stock indexes had begun the day up after second-quarter earnings kicked off with PepsiCo Inc beating analysts’ estimates. Wall Street banks JPMorgan, Citigroup and Wells Fargo are set to report earnings today.
While Refinitiv data suggests second-quarter results will show the second-biggest quarterly drop in corporate earnings since 1968, investors maintain some degree of confidence in the US consumer.
Consumer price index data today, retail sales data on Thursday and consumer sentiment data Friday are expected to offer insight into how Americans are spending.
“America’s economy-driving consumer will be in the spotlight, one that it will share with a slew of key events like central bank meetings in Canada and Europe. Just how far down the road to recovery the world’s major economies have travelled will be gleaned from top-tier data,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.
“The week’s main sights are on US indicators Thursday on retail spending and weekly jobless claims.”
The euro rose 0.42 per cent to US$1.134 (RM4.84), maintaining its uptrend since late last month. Looming large for the single currency this week is a European Union summit on July 17-18, at which leaders need to bridge gaps on a long-term budget.
Investors will also watch for whether an agreement on a proposed €750 billion (RM3.63 trillion) recovery fund for the bloc emerges. — Reuters
