The big news in forex caused unexpected changes in G7 currencies’ performance in the week ending 27th September economic analysis. In a relatively quiet week, COVID-19 and economic fundamentals downplayed riskier assets while uplifting safe-haven currencies.
Fundamentals in the Big News in Forex
Three major fundamentals were featured in the big news in forex through the week.
Coronavirus Pandemics
Renewed Spikes in coronavirus infections in many countries undermined economic recovery efforts and contributed negative big news in forex. The negative sentiments favored the greenback.
On Thursday, many European countries recorded high numbers of new coronavirus infections. The infections in the UK increase rapidly and could hit 50k new cases per day if not contained.
Early in the week, the coronavirus’s effect was responsible for the downward trend in many g7 fx currencies. Also, fears of a reintroduction of lockdown measures added more pressure on the riskier market.
Economic Updates
Many economies posted poor economic updates, while others failed to release any data over the week undermining their currencies.
Oil
According to oil usd news, global prices for the commodity dropped due to the coronavirus effect and high inventories. The oil usd news has a direct impact on commodity-related assets.
Performance Review Of The G7 Currencies
Table: g7 performance review summary
| Currency Pair | 21st Sep | 27th Sep | Average Price | Percentage Change | Remarks |
| USD | 93.684 | 94.682 | 94.244 | 1.861 | increase |
| EUR/USD | 1.1769 | 1.1630 | 1.1687 | 1.7488 | drop |
| GBP/USD | 1.2814 | 1.2745 | 1.2752 | 1.3163 | drop |
| USD/JPY | 104.64 | 105.60 | 105.18 | 1.00 | increase |
| USD/CHF | 0.9143 | 0.9284 | 0.9225 | 1.8429 | increase |
| USD/CAD | 1.3306 | 1.3348 | 1.3384 | 1.3632 | increase |
| AUD/USD | 0.7723 | 0.7702 | 0.7109 | 3.5945 | drop |
| NZD/USD | 0.6666 | 0.6542 | 0,6558 | 3,2105 | drop |
Back To Recovery For The USD
In a flip-flop to the previous week’s downfall, the dollar rallied and closed the week stronger by 1.85% at 94.624. In the last week, it had fallen by 0.44%. The US had a quiet week on the economic upfront, leaving usd trading news to economic update, covid 19 pandemics, and the central bank’s sentiments.
The big news in forex also revealed that key economic data were mostly skewed to the negative. First, the service sector slowed slightly from 55.0 to 54.6. However, the manufacturing sector improved slightly from 53.1 to 53.5.
Labor market figures also disappointed usd trading news indicated by rising jobless weekly claims. The jobless claims increased slightly from 866k to 870k. Wrapping up usd trading news in the week, durable goods orders grew marginally by 0.4%, falling short of earlier predictions.
Comments from Feds Chair Powell also featured heavily in the usd forex news. Powell emphasized the need for increased government support in the economic recovery efforts. He further stated that global recovery largely depends on the containment of the contagious disease.
Despite the negative economic data and coronavirus pandemics, the dollar rallied strongly on negative global sentiments and counter currency flow.
GBP/USD
In the UK, it was calm on the economic calendar. This left performance of gbp usd to financial data that was skewed to the negative. While economists had projected industrial trend orders to increase, it dropped from -44 to -48.
The service sector significantly changed to upset the performance of the pound. It dropped from 58.8 to 55.1. On a similar trend, the manufacturing industry dropped slightly from 55.2 to 54.3.
The long-standing Brexit talks stalemate also weighed heavily on the pound. The UK recorded daily high coronavirus records per day. More damage came from the planned reintroduction of coronavirus containment measures, which would adversely derail economic recovery efforts.
According to investing.com, the pound shed off 1.32% to the dollar, closing down at 1.2746. The drop reversed the previous week’s gain of 0.95%.
EUR/USD
The Eurozone witnessed another busy week on the economic front. According to eur usd news update, the euro’s performance was primarily affected by mixed financial data reports.
Eurozone and Germany recorded an improved consumer confidence level but was not sufficient to leverage the euro’s value against the dollar. The business-level also improved slightly but below earlier projection. On a positive note, the manufacturing sector increased significantly from 51.7 to 53.7.
However, the manufacturing industry’s positive impact on the improvement of the euro was heavily pulled down by a reduced service sector. The service sector fell from 50.5 to settle lower at 47.6.
While the euro fluctuated under the weight of economic data, it was a spike in new coronavirus cases in Europe that featured heavily in the eur usd news update. The renewed spikes ultimately nailed the downfall of the euro.
Investors factored in the possible reintroduction of containment measures on the euro and adopted a risk aversion strategy. Thus the investors went for the safety of the dollar.
According to eur usd news update, the euro went down by 1.77% to close lower at 1.1631. The major British indices also went on a bearish run. In the previous week, the euro had fallen dismally by 0.05%.
The Yen Falls in The Far East
On the economic calendar, Japan had a quiet week leaving the yen’s performance to economic updates that were mixed. Usd jpy news update indicates that the yen dropped by 0.97%, reversing a 1.50% gain in the previous week.
Figures from the private sector in Japan were not encouraging, either. According to usd jpy news update, the figures dropped, pulling the yen down mid-week. In the private sector, job losses continued but at a reduced pace.
On the other hand, the private sector recorded a tremendous increase in work backlogs. Export orders declined to add more damage to the yen. However, the yen received some support from a slight improvement in the manufacturing and service sectors.
The manufacturing went up from 47.2 to 47.3 while the servicing industry rose from 45.0 to 45.6. Despite the positive results, it was not enough to uplift the yen out of the red zone.
Adding to the usd jpy news update, the BOJ’s statement pointing Japan’s gloomy economic outlook made things worse for the yen.
CHF/USD
In Switzerland, the economic calendar was blank from Monday to Thursday. On Friday, the big news in forex weakened the swiss franc as investors factored in Brexit uncertainty and covid 19 pandemics.
Jitters of spikes in coronavirus new cases in Europe and possible reintroduction of lockdown measures worked against the Swiss franc. At the end of the week, the Swiss franc also reacted negatively to monetary policy sentiments from the central bank and went down further.
The central bank kept rates unchanged while increasing optimism on economic recovery efforts. The big news in forex market, further, pointed out that the Swiss franc lost nearly 2% to the dollar closing at 0.9225.
USD/CAD
Canada, also, had a nearly quiet week on the economy upfront. Usd cad news update depicts that economic data from Canada had a muted impact on Lonnie.
Lonnie was weighed significantly by two factors. One, the global drop in oil prices attributed to covid 19 impacts. And, two, spikes in new coronavirus cases hampering the global economic recovery efforts.
Usd cad news update also revealed that the Lonnie fell by 1.38%, closing weaker at 1.3386. In the previous week, it had dropped by 0.19%.
A Bearish Week For The Aussie Dollar
On the week ending 27th September aud usd news update indicated that the Australian dollar dropped massively by 3.54 to close at 0.7081. The aud usd news update further suggests that the Aussie’s performance was primarily driven by the coronavirus pandemic and the global economic recovery efforts.
Furthermore, an aud usd news update showed no financial data from Australia to support Aussie. Right from the beginning, the bears took charge of the Aussie every day of the week to make it the biggest loser in the week.
The Bears Took Control Of NZD/USD Currency
Another Big news in forex market was the bears in control of the kiwi dollar. Closer behind to the Aussie in the bear run, the kiwi fell by 3.15 to close lower at 0.6546. New Zealand released mixed economic data that failed to support the kiwi dollar.
The big news in forex shows that NewZealand had a favorable trade balance as it recorded a sharp decline in imports while export trade increased, creating the largest trade surplus since 2014.
Conclusion
In the week ending 27th September, the American dollar appreciated enormously and gained against all the other g7 fx currencies. Notably, the Australian dollar and the NewZealand kiwi were the biggest losers.
The negative big news in forex emanating from COVID 19 pandemics and economic updates elicited risk aversion among forex investors. This resulted in high demand for the dollar.
Traders are now wondering – Is the greenback regaining its lost safe-haven status?