According to Foreign exchange analysis, the first week of June was hectic.
The risker markets were significantly favored, responding positively to fiscal and monetary policies.
Additionally, a slew of positive economic forex trading news affected the foreign exchange market.
On the other hand, US-China sour relationships softened while COVID 19 battles raged on.
Major Forex News
Foreign exchange analysis revealed a shift in forex trading news affecting the foreign exchange market.
Previously the forex market had been driven by major forex news of the COVID 19 pandemic and the US-China tensions.
Here are the fundamentals that affected the forex market over the week.
Oil News
The oil prices have been on the rise recently attributed to retailers’ fear of missing out (FOMO) forex emotions, thus pushing the prices up as opposed to fundamental value.
Oil prices rose over the week to a high of $40 per barrel. Changes in oil prices have a corresponding effect on the commodity-related currency pair.
COVID 19 Battles
Globally, COVID 19 statistics continue to increase and have reached over 7 million confirmed cases.
The recovery stands at approximately 3.4 million, while fatalities are slightly above 402 k.
Many economies continue to ease on lockdown measures supported by the continued drop in new cases of coronavirus, with some having no new cases.
There is increasing hope on coronavirus treatment.
Dr. Antony Fucci, the director of the National Institute of Allergy and Infectious Diseases, said that the US should have a ‘couple, hundred million doses of COVID 19 vaccine by the start of 2021.’
Sadly, the coronavirus could quickly spread among the closely spaced protesters in major cities of the US.
The death of George Floyd, a black man in police custody, sparked widespread protests in the US.
While demanding for justice, demonstrators clashed with police while disregarding curfews.
US-China Tensions Cool Off
The week was relieved of the US-China tensions, and trades went on between the two economically strong nations.
A case in mind is when China purchased soybeans from the US on Monday amid orders to stop goods from the US by the Chinese government.
Economics Stimulus
In the week, the foreign exchange market was predominantly rallied by financial stimulus amid reduced US-China tensions.
Also, the continued decline in coronavirus new cases, leading to the opening up of many economies, supported the market.
Significantly, positive forex news from the European Commission Bank, improved employment figures, fiscal stimulus, economic recovery plans, and other positive economic major forex news affected the forex market.
The G7 Currency Review And Forex Analysis
Table: foreign exchange analysis summary.
| Currency pair | 1st June | 7th June | Average | Percentage change | Remarks |
| USD | 97.820 | 96.922 | 97.263 | 1.443 | drop |
| EUR/USD | 1.1135 | 1.1309 | 1.1246 | 1.8921 | up |
| GBP/USD | 1.2494 | 1.2716 | 1.2599 | 2.9969 | up |
| USD/JPY | 107.59 | 109.65 | 108.92 | 1.73 | up |
| USD/CAD | 1.3573 | 1.3405 | 1.3486 | 2.6614 | drop |
| AUD/USD | 0.6798 | 0.6995 | 0.6920 | 4.9272 | up |
| USD/CHF | 0.9609 | 0.9629 | 0.9605 | 0.1300 | up |
| NZD/USD | 0.6293 | 0.6524 | 0.6430 | 5.1669 | up |
USD Downfall for the 3rd Consecutive Week
The demand for risk markets amid global economic recovery predominantly weakened the green buck in the week, as indicated by forex analysis.
According to investing.com, the dollar opened the week at 97.820 to close lower at 96.922 on a bearish run shedding 1.43% amid Facing strong resistance at 97.00.
In the previous week, the dollar had lost 1.52%.
On a positive sentiment, the dollar bounced back a bit on Friday on the announcement of a 2.5 million increase in employment numbers for May.
The unemployment figures dropped from 14.7% to 13.3 % beating early predictions of 19% by economists.
Also, increased business confidence provided some support for the dollar.
EUR/USD
The euro rallied substantially during the week on a bullish run riding on a risk market appetite to achieve 1.89% closer to the 1.84% gain in the previous week.
Also, positive forex news from the European Central Bank on Thursday accelerated the bullish run.
The European Central Bank increased the coronavirus pandemic bond-buying economic stimulus program from 750 billion euros to 1.35 Trillion euros.
The program will run till June 2021 or when the COVID 19 crisis ends.
Immediately after the announcement, EUR/USD jumped 0.95 % to a three month high of 1.1335.
Global sentiments predominantly affected this currency pair, as many member states of the EU posted positive economic data.
Brexit talk between European Union fourth round ends in a deadlock again, particularly on fishing, trade, and governance.
However, the better than expected US job market and re-opening of trade had little impact on this currency pair.
These fundamentals could have some market impact in the coming week.
USD/JPY Tough Week for the Yen
It was a rough week for the yen as it was negatively affected by positive global sentiments and poor economic data from Japan.
Foreign exchange analysis indicated that the dollar gained steadily against the yen to register 1.73 % stronger in the week.
In the previous week, the dollar had gained 0.18% against the yen.
Must Read: Forex News Trading Signals From 25th May to 31st May
Risk positive sentiments on improved American and Canadian economic data pulled down the yen.
As the economies improved, investors shifted to risk markets, leaving the yen with severe damages than the dollar.
GBP/USD Strong Run
Foreign exchange analysis shows that the pound gained 3% in the week ending 7th, up from the previous week’s gain of 1.40%.
In the week, the sterling pound rallied confidently on the weak American dollar to reach a high of 1.2700 since mid-March.
According to foreign exchange analysis, the pound gained in each day of the week having opened the week at 1.2494 and closed at 1.2665.
COVID 19 pandemic on the downward trend in Britain and increasing business confidence supported the pound profoundly.
Also, the continued re-opening of the British economy worked against the American dollar.
However, the Brexit talks hit a stalemate but did not affect the pound.
USD/CHF Fluctuates
Results of foreign exchange analysis show that the USD/CHF currency pair started the week on the wrong foot as traders shifted focus to the re-opening trades.
Sound economic data from China also supported the Swiss franc.
The United States of America unrest and the cooling of US-China tension had no notable effects.
Encouragingly, the American dollar gained on the surprise announcement on Friday on increased employment numbers amid a negative expectation report.
AUD/USD Bullish Run
Bullish run shown by forex analysis indicated that the AUD/USD currency pair started the week at 0.6798 and closed at 0.6995, having gained significantly 4.9272%.
The Australian dollar won emphatically on much-needed help from positive global sentiments, indicated by foreign exchange analysis.
Also, the Aussie had support from a surprising improvement in Canadian economic reports and the Improved economy of China.
The Australian government announced an economic stimulus package which further catapulted the strength of the Aussie.
Furthermore, the cooling of US-China trade tensions and the US’s ongoing protests had little impact on the performance of the USD/AUD currency pair.
USD/CAD Downwards
The commodity-related currency gained strength from oil prices increase to register 2.6614% gain against the American dollar.
Besides, sparse economic data of the US and re-opening of trade favored the Canadian dollar.
Analysis of forex news reveals that the improved economy of China also boosted the Canadian dollar.
On a surprise move, Canada recorded 286 000 employment figures mostly on a full-time basis adding more pressure on the American dollar.
According to the analysis of foreign exchange, eased US-China trade tensions and positive global sentiments pulled the dollar downwards.
Also, foreign exchange analysis suggests that investors preferred the commodity-related fx currency on the re-opening of trade.
NZD Week Winner
The New Zealand dollar reacted positively to global major forex trading news to open the week at 0.6293 and close higher at 0.6524 end of the week on a bullish run.
The bullish run of the New Zealand dollar resulted in slightly over 5% gain against the American dollar as the week’s biggest winner.
Positive sentiments from New Zealand on being virtually free from coronavirus uplifted the kiwi.
The country has only one active case recorded on 1st May 2020.
Forex analysis also suggests that the kiwi found much-needed support on an excellent economic report from China and the re-opening of New Zealand economies.
Besides, Economic support measures from the New Zealand government, such as wage subsidy and small business cash flow loan schemes, favored the New Zealand dollar.
Furthermore, positive global dairy trade helped the kiwi greatly.
On Wednesday, the kiwi strongly rebounded on “re-opening trade”.
Additionally, New Zealand dollar leverage on ease of trade tension between the US and China.
However, the analysis of foreign exchange shows that weak economic data and mass unrest in the United States of America had little impact on the new Zealand dollar.
Must Read: NZDUSD profitable trade with a deeper pullback
Conclusion
Foreign exchange analysis concluded that the commodity-related currencies gained sharply against the American dollar and the American dollar lost against the British pound and euro.
However, the American dollar managed to stay stronger against the Yen and Swiss franc – safe haven currencies.
Financial stimulus and economic data forex trading news were the key drivers of the foreign exchange market in the week.
These major forex news will continue to drive the forex trading activities in the coming weeks.