Dollar ends flat as gains in U.S. stocks keep upside in check

Market Review - 08/04/2020  23:46GMT  

Dollar ends flat as gains in U.S. stocks keep upside in check

The greenback pared intra-day gains made in Asia and Europe and ended largely flat on Wednesday due to uncertainty whether the coronavirus pandemic may soon peak or not. Market is awaiting release of U.S. initial weekly jobless claims due out Thursday to guauge damage to the U.S. economy in the wake of COVID-19 pandemic. The single currency fell across the board after European Union Finance Ministers failed to agree on virus rescue package.  
  
Versus the Japanese yen, although dollar initially fell to session lows of 108.51 at Asian open on cross-buying in jpy, price erased its losses and gained to 109.00 on recovery in U.S. Treasury yields. The pair later ratcheted higher to intra-day high of 109.09 in New York morning but only to fall back to 108.61 on renewed usd's weakness, price last traded at 108.81 near the close.  
  
The single currency retreated from 1.0902 in Australia to 1.0860 in Asia on cross-selling in euro. Despite recovering to 1.0887, the pair then briefly dropped to session lows of 1.0831 at European open after EU Finance Ministers failed to reach a deal over a coronaviurs aid package. However, price then rebounded in tandem with sterling to 1.0888 in New York morning but only to move back to 1.0851 on cross-selling in euro.  
  
Reuters reported the chairman of euro zone finance ministers Mario Centeno said on Wednesday he was suspending talks on half a trillion euro package to support the economy against the coronavirus epidemic until Thursday, to bridge divisions over its elements.     
"We came close to a deal but we are not there yet," Centeno said on Twitter after 16 hours of talks with numerous breaks, resumptions and bilateral discussions brought no breakthrough.     "I suspended the Eurogroup and continue tomorrow, Thursday," he said.     Officials said the deadlock was caused by a feud between Italy and the Netherlands over conditions attached to euro zone credit for governments to fight the coronavirus epidemic.   
  
The British pound went through a hectic trading session. Cable met renewed selling at 1.2352 in Australia and fell to 1.2311 in Asia before rebounding to 1.2342 but only to drop in tandem with euro to 1.2289 at European open. However, the pair then erased its losses and rose to 1.2395 in New York morning on usd's weakness. Price then ratcheted higher to session highs of 1.2419 before retreating on profit-taking.  
  
Data to be released on Thursday :  
  
New Zealand retail sales, UK RICS housing price balance, GDP, industrial output, manufacturing output, construction output, trade balance, Japan consumer confidence index, Germany exports, imports, trade balance, current account, Italy industrial output, U.S. initial jobless claims, PPI, core PPI, University of Michigan sentiment, wholesale inventories, wholesale sales, and Canada employment change, unemployment rate.