The continuing spikes in coronavirus infections also rein in on trading prediction in the week ending 2nd Aug. Forex pool managers took advantage of the weakening greenback, which continued losing against its counterparts.
Forex Fundamentals That Affected The G8 Currencies Performances
Covid 19 pandemics and global economic growth fundamentals primarily drove the performance of G8 currencies trading predictions this week.
Covid 19 Pandemic
As on Sunday 2nd Aug, confirmed cases of the covid 19 stood at 17.9 million globally while recoveries stood at 10.6 million. On the other hand, the death toll reached 0.68 million.
On a weekly basis, the total number of coronaviruses infections globally continued on the upswing, to increase by 1.8 million. The increase comes on a backdrop increase of 1.74 in the previous week. The numbers have been increasing significantly each week.
The coronavirus pandemic has continued to ravage world economies. And the resurgence of the virus in many countries has undermined economic recovery efforts.
It has also continued to create more fears causing investors to abandon the riskier markets in favor of the safe-haven currencies.
Global Economic Outlook
Gold prices went upwards amid fears for the global economic recovery. The concern stemmed from the ever-increasing new cases of coronavirus globally.
During bad economic outlook, forex pool investors invest in the safe-haven currencies, Gold, and the low yielding markets such as the euro.
In the week, oil prices declined globally due to spikes in new cases of coronavirus infections and overproduction. Changes in oil prices have a profound impact on commodity-related currencies such as the loonie.
Performance Review Of The G8 Fx Currencies
Table: G8 currency trading summary
| Currency | 27th Jul | 2nd Aug | average | Percentage change | remarks |
| USD | 93.615 | 93.321 | 93.405 | 1.15 | drop |
| GBP/USD | 1.2882 | 1.3090 | 1.2999 | 2.3376 | gain |
| EUR/USD | 1.1752 | 1.1776 | 1.1777 | 1.05 | gain |
| USD/JPY | 105,38 | 105.89 | 105.20 | 0.23 | gain |
| USD/CHF | 0.9199 | 0.9129 | 0.9144 | 0.8579 | drop |
| USD/CAD | 1.3357 | 1.3415 | 1.3383 | 0.02 | gain |
| AUD/USD | 0.7150 | 0.7143 | 0.7167 | 0.5419 | gain |
| USD/NZD | 1.4962 | 1.5086 | 1.4996 | 0.2592 | gain |
USD
The usd currency forecast suffered yet another weekly blow. It was the 6th consecutive loss in a row. In the week, the dollar closed at 93.349, having lost 1.15 %.
In the previous week, the dollar had shed off 1.57% of its value.The losing streak resulted in the dollar losing 4.15% of its value in July.
The weak performance of the greenback was driven downwards by weak economic data, continued spikes in coronavirus new cases, and a friendly Fed.
Furthermore, President Trump called for the postponement of the presidential election, which delivered another blow to the usd currency forecast on Thursday.
In renewed efforts to boost its badly hit economy, the Fed announced that it would continue with its lending plans, possibly up to December.
This forex signal indicates a three months extension to the original plan, which expires in September.
Due to the second wave of the covid 19 high deaths, the United States of America government reported negative economic data.
Notably, weekly jobless claims continued on the upswing while the consumer confidence level dropped. As expected, the weekly jobless claims went up to 1.434 million.
And to add more damages to the limping dollar, the US’s GDP contracted by close to 33% in the second quarter.
As investors digested the news of the contracted GDP, Equities in the US stock market dropped, adding more undue pressure on the dollar.
Industrial productivity increased, while consumer spending rose for the second month consecutively. Despite receiving these boosts towards the end of the week, it was not enough to uplift the usd currency forecast from the reds.
GBP/USD
Great Britain lacked significant economic data over the week. This left the GBP/USD forex pick dependent on the greenback’s weakness.
Trading prediction indicates that the pound rallied strongly by 2.3376% to close at 1.3085, having opened the week at 1.2882. In the previous week, the sterling pound had gained 1.80% against the American dollar.
The pound takes the top spot in this week’s trading prediction supported by positive economic data from the United Kingdom.
As the greenback lost strength, the pound took advantage to gain power. The pound also drew strength from the US stimulus uncertain debate and possibility of Brexit deal, closing soon.
EUR/USD
The economic calendar in the European Union was full, resulting in a busy week. The Eurozone economy dropped by 12.1%, with Germany and France reporting contracted economies as well.
However, these negative performances were not enough to alter Forecast dollar to euro trading predictions over the week.
The forecast dollar to euro trading prediction rose by 1.05% to close at 1.1778. In the previous week, the forecast dollar to euro trading prediction had rallied by 2.00%.
USD/JPY
On the economic calendar, japan recorded a relatively quiet week. The Japanese yen gained 0.29% to close the week stronger at 105.83 against the greenback. In the previous week, it had gained 0.82% against the dollar.
Retail sales continued on the downswing to increase by 1.20%. However, industrial production improved by 2.7%, providing the much-needed boost for the JPYUSD forex pick.
The weakening of the dollar added more support to the yen. Risk aversion measures resulting from spikes in covid 19 related deaths in the US and fall in equities boosted the yen.
The yen traded in the green most of the week but lost considerably on Friday, responding negatively to intervention intentions announced by the federal government.
USD/CHF
The Swiss franc took advantage of the weakening dollar to gain more strength over it. The USD/CHF forex pick opened the week at 0.9199 and rallied strongly to close the week at 0.9129, having gained 0.8579% over the American dollar.
The raising spikes of new cases of coronavirus globally and in many states of the US pushed the Swiss franc upwards. Additional pressure came from uncertainty in economic global growth and decline in the US stock exchange equities.
More negative sentiments that favored the Swiss franc emanated from stimulus debate uncertainty in the US. As the price of Gold rises globally, forex pool investors shunned the greenback in favor of the Swiss franc.
Forex traders became jittery on global economic growth uncertainty due to the rising cases of coronavirus infections. On Friday, Switzerland posted improved retail sales to push the Swiss franc up.
USD/CAD
The economic calendar in Canada was nearly empty, leading to a relatively quiet week economic wise. However, the CAD/USD currency trading prediction driven by sparse financial data increased dismally by 0.02%.
In the previous week, the loonie had risen by 1.22%. At the start of the week, oil prices dropped and declined continually over the week, pulling the Lonnie downwards with it. Also, the loonie went down as the Australian dollar dropped.
On a positive note, the Canadian economy grew by 4.5% better than an earlier prediction of 3.5%. Also, the production improved by 7,5% to push up USD/CAD trading prediction on Friday.
AUD/USD
The Australian dollar rallied by 0.53% to close at 0.7143 after having opened the week at 0.7140. Australia had a relatively quiet economic calendar delivering mixed reactions.
AUD/USD trading prediction driven on the upswing by better than expected economic data. Production prices dropped by 1.20$ while consumer price reduced by 1.9% in Australia.
While the Australian dollar strengthens amid the weakening greenback, it was pressured downwards by spikes in coronavirus new cases.
USD/NZD
It was a relatively quiet week for the NewZealand dollar on the economic calendar, leaving the kiwi under other forex fundamentals. In the week ending 2nd Aug, the kiwi fluctuated and finally settled in the reds, lower by 0.2592%.
The downward trend of the kiwi resulted from coronavirus pandemics and risk aversion measures; Traders engaged risk aversion measures in response to spikes in new cases of covid 19 infections and fall in the US equities.
Business confidence improved marginally to provide some support for the kiwi, though not enough to pull the kiwi out of the reds.
Conclusion
The US dollar endured another hard week against the other fx currencies. Primarily the second wave resurgence of covid pandemic and poor global economic outlook weakened the greenback.
The greenback managed to gain against NewZealand dollar, Japanese yen, and the Canadian dollar. The weekly basis coronavirus statistics show a worrying upward trend.
Therefore, coronavirus, combined with global economic recovery data, will continue to drive fx currency trading prediction for a while.