The fourth week of June forex market forecast saw demand for risk markets decline as investors found safety in safe-haven currencies.
Online forex news was awash with fears of coronavirus resurgence and a return of lockdown measures.
Other fundamentals – Geopolitics and economic data – also played a significant role in forex trading this week, as discussed in this article.
Fundamentals that affected the Foreign Exchange Market are:
1. Geopolitical Tensions
On Friday, China warned the US not to interfere with its affairs concerning Hong Kong and Taiwan.
This reaction came after a move on Thursday, where the US passed a bill to sanction China’s top officials.
The Beijing administration considers Taiwan as part of its territory. Also, it plans to impose national security law in Hong Kong.
The United States of America threatened the European Union and the UK as it planned to impose an additional $3.1 billion tariffs on goods originating from Germany, France, Spain, and the United Kingdom.
This move will likely worsen tensions between Europe and the United States of America.
2. Earth Economic Outlook
The International Monetary Fund (IMF) projected that the world economy would reduce by 4.9% up from its earlier projection of 3.0 %.
According to the IMF, this new projection is due to severe damages caused by covid 19 pandemic than earlier thought.
The weak global economic outlook triggers risk aversion measures as investors settle on the safe-haven currencies.
3. Resurgence of COVID 19
Many economies continue to open up, but online forex news on coronavirus second-wave pandemic cases keeps affecting the forex market forecast.
Many countries continue recording high numbers of covid 19 cases daily, and the US is badly hit.
Some states in the US have recorded high figures and have started the gradual implementation of lockdown measures and pauses to reopen businesses.
The coronavirus infections are increasing by over 5% in 31 states of America.
Looking at covid 19 statistics, confirmed cases as on 28th June is over 10 million, with recoveries at slightly over 5 million.
Sadly, fatalities worldwide from covid 19 has reached half a million.
4. Oil Prices
Demand for oil received a blow on increased cases of coronavirus infections, particularly in the US, thus affecting forex trading this week.
According to investing.com, oil prices dropped from $40 per barrel to $38 this week, losing 3.17%.
The API report showed that oil prices were negatively pressured by exact forex signals from resurging covid 19 infections, increased production, high inventories, demand destruction, and Geopolitical tensions.
Forex Market Forecast of G7 Currencies
Table:g7 forex market forecast summary
| Currency pair | 22nd June | 28th June | average | Percentage change | remarks |
| USD | 96.985 | 97.404 | 97.103 | 0.177 | up |
| EUR/USD | 1.1260 | 1.1222 | 1.1247 | 0.4071 | down |
| GBP/USD | 1.2463 | 1.2344 | 1.2417 | 0.1133 | down |
| USD/JPY | 106.89 | 107.13 | 107.00 | 0.22 | up |
| USD/CHF | 0.9477 | 0.9473 | 0.9473 | 0.5303 | down |
| USD/CAD | 1.3522 | 1.3688 | 1.3621 | 0.6064 | up |
| AUD/USD | 0.6907 | 0.6886 | 0.6887 | 0,4170 | down |
| USD/NZD | 1.5432 | 1.5602 | 1.5552 | 0.0256 | up |
USD
According to investing.com, the American dollar rose by 0,177% in the last week of June.
The dollar’s performance was driven by exact forex signals of covid 19 pandemic second wave fears, the economic recovery of the US, and geopolitical tensions.
Forex market forecast proved that the greenback also rode on the improved technology sector of the US.
The dollar started the week at 96.985, reducing on Monday and Tuesday.
However, it turned around from Wednesday and regained its earlier losses to close higher at 97.404, which was emerging to be 0.177% stronger.
The turnaround is attributed to the global fear of the second wave covid 19 infections.
This online forex news triggered risk aversion measures among forex traders.
The strength of the dollar was undermined by online forex news of the record number of new coronavirus infections throughout the United States.
There was a growing fear that lockdown measures will be re-imposed in the US to combat the virus.
GBP/USD
Global risk sentiments and geopolitical tensions were the key drivers that impacted sterling pound forex trading this week.
Geopolitical tensions, bad global economic outlook, and rising cases of covid 19 infections are the exact forex signals that led traders to embark on risk aversion measures.
As a result of the eversions, traders favored the safe-haven currencies.
Also, the European Union parliament leader, Boris Johnson, was unwilling to compromise on Brexit talks.
According to investing.com, the pound was firmer on Monday and Tuesday.
However, it lost strength from Wednesday as traders went on risk aversion measures reacting to online forex news on increasing coronavirus infections.
JPY/USD
The Japanese yen had a rough week against the American dollar.
It underperformed due to weak economic outlook and negative sentiments from the central bank of japan.
In particular, the Japanese yen fell on the rising cases of coronavirus pandemic and bullish run of the US technology stocks.
Also, the fall in the economy of japan strongly tainted the yen.
The dollar started the week lower at 106.89 to close higher at 107.13 gaining 0.22 against the yen.
Bank of Japan (BOJ) governor Huruhiko Kuroda said on Friday that the second wave of coronavirus pandemic would significantly damage Japan’s economy.
He further indicated that Japan was ready to provide additional economic stimulus packages to fight the second wave coronavirus pandemic.
The JPY/USD pair forex market forecast was affected by rising covid 19 cases, geopolitical tensions, and weak economic outlook of the planet earth.
EUR/USD
The euro was a top performer over the fourth week of June, primarily driven by negative global risk sentiments and dollar weakness.
Besides, there was improved business in the Eurozone that supported the euro.
The euro opened the week at 1.1260 and closed at 1,1247 on Sunday, having lost 0,4071%.
The United States of America announced on Wednesday plans to impose $3.1 billion in additional tariffs on goods originating from Germany, France, Spain, and the United Kingdom.
This intention pushed the euro down against the American dollar and other major currencies.
Additionally, exact forex signals from the coronavirus resurgence fears and weak economic outlook predicted by the International Monetary Funds (IMF) also weighed heavily on the euro’s forex trading forecast.
In a positive mood, ECB’s commitment to supporting Europe’s economic recovery from coronavirus damages helped the euro forex trading forecast profoundly.
CHF/USD
There were no exact forex signals from Switzerland indicating that counter currency flow and negative sentiments significantly influenced the swiss franc forex trading forecast.
The forex trading forecast summary above shows that this currency pair started the week at 0.9477 to close lower at 0.9473 on Sunday, having shed 0.5303%.
The Swiss franc was boosted by negative forex trading forecast on the increasing cases of covid 19 pandemics, especially in America.
This negative sentiment pushed the Swiss franc on Friday up to be among the week’s top gainers.
AUD/USD
The Australian dollar gained all through the week driven by a favourable global forex trading forecast and an improved economy of Australia.
In addition, the improving technology sector of the US boosted Aussie.
There was a weakness in the Australian dollar resulting from news on covid 19 infections, geopolitical tensions, and the world’s weak economy.
Notably, Australia recorded the highest number of coronavirus infections in a day on Thursday, the highest in two months.
USD/CAD Bullish Run
The Canadian dollar emerged as the biggest loser in the forex market forecast over the week.
There were no exact forex signals from Canada.
The loonie was driven by changes in oil prices, geopolitical tensions, and negative global risk sentiments.
Forex market forecast on the table above indicates that the USD/CAD started the week at 1.3522 closing higher on Sunday at 1.3688, gaining 0.6064%.
On Tuesday, the United States administration announced its intention to re-impose 10% tariffs on aluminum products from Canada.
Further damage came to the loonie on Wednesday as oil prices fell. Another blow also came from the US as it downgraded Canada credit ratings.
Other negative sentiments, such as geopolitical tensions, increasing covid 19 infections, and poor global economic outlook, also added to the devastation of the Canadian dollar.
All these factors prompted investors to jump on to the safe-haven currencies.
USD/NZD
The New Zealand dollar forex market forecast had a mixed performance over the week.
The kiwi started the week stronger before losing momentum.
Negative global risk sentiments and economic measures of New Zealand predominantly affected this currency pair.
The USD/NZD currency pair started the week at 1.5532 to close higher on Sunday at 1.5602, gaining dismal 0.0256%.
The Reserve Bank of New Zealand (RBNZ) kept interest rates and asset purchases unchanged, to protect its export trade, thereby impacting the forex market forecast.
Also, RBNZ’s monetary policy statement touching on its intentions to provide additional stimulus pushed the kiwi southwards.
Traders dumped the kiwi on risk aversion measures in reaction to increased coronavirus infections, bad global economic outlook, and geopolitical tensions.
Conclusion
The rising cases of coronavirus second wave pandemic significantly affected the forex market forecast over the week.
The dreaded covid 19 drove forex trading this week and for more weeks to come.
These fears drove demand for the American dollar to gain against all currencies except the Swiss franc.
The surge in coronavirus infections may compel countries to re-impose the lockdown measures as the war on the virus does not end soon until we have a vaccine.
