THE dollar appreciated by 0.10% to 97.40, benefiting from safe-haven flows following rising concerns about a rise in new coronavirus cases; and geopolitical risks – clashes along the India-China border, as well as fresh provocations by North Korea – blowing up a liaison office building it operates with South Korea.
Besides, the dollar received some impetus from retail sales data that came in better than expected at 17.7% m/m in May from -14.7% m/m in April (cons: 8.0% m/m); and the Trump’s administration plan to prepare a US$1 trillion infrastructure stimulus proposal to spur the economy.
Separately, Fed chairman Powell told lawmakers in his testimony that a full US economic recovery is still out of reach until the coronavirus pandemic is contained. With such economic uncertainty, Powell reiterated that the central bank will use its “full range of tools” and also called for more support from Congress to support businesses and households that were still affected by the pandemic.
Brent crude price rebounded by 7.18% to US$41.51 per barrel following the International Energy Agency increasing its oil demand forecast for 2020 by 500K bpd to 91.7 million bpd. The Opec and Opec+ ministerial panel also reviewed record oil supply cuts by countries such as Iraq and Kazakhstan to improve compliance with quotas amidst rising coronavirus cases in some parts of the US and China.
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