Weekly News Summary for July 24-30, 2020

Friday, July 24, 2020: Euro Rallies to 22-month High

The euro rallied to a 22-month high against the US dollar on Friday, rising above $1.16 for the first time in nearly two years, due to the greenback’s weakness and upbeat purchasing manager indexes (PMIs) across Europe.

IHS Markit’s composite Eurozone PMI was up 54.8 in July from 48.1 in June, beating economists’ expectations and signaled a return to growth in the month, as more businesses resumed operations after the lockdowns.

Monday, July 27, 2020: Gold, Silver Records New Highs

Gold rose to a new all-time high on Monday, as concerns over the situation of the US economic recovery and further signs of the second wave of COVID-19 around the world, fueled demand for the safe-haven asset.

Gold futures surged as high as $1,939.35 per troy ounce before retreating to trade at $1,938.35 per ounce, while silver futures climbed again in sympathy, adding 6.1% to $24.24 per ounce, its highest since 2013.

Tuesday, July 28, 2020: ECB Advises Banks Against Paying Dividends

The European Central Bank (ECB) has advised eurozone banks to not pay dividends for the rest of 2020, but instead told them to keep their money to toughen their defenses against a likely wave of bankruptcies.

The ECB also stated that it would not tighten supervisory standards on liquidity and capital until the end of 2022 at the earliest, as the central bank looks to avoid turning an expected economic crisis into a financial crisis following the last wave of banking issues in the continent.

Wednesday, July 29, 2020: US Dollar Hits Two-year Low Before Fed Statement

The US dollar declined to a two-year low on Wednesday before the Federal Reserve is expected to support its commitment to keeping its near-zero interest rates for years, with market players focused on whether the central bank will allow inflation to run higher than previously expected.

The greenback lost 0.26% to 93.51 against a basket of other currencies, having slipped earlier to 93.39, its lowest level since June 2018, while real 10-year Treasury yields were down to negative 0.93%.

Thursday, July 23, 2020: Renault Reports Record €7.3B Net Loss

French carmaker Renault reported on Thursday that it generated a record net loss of €7.29 billion in the first half of 2020, due to the impact of losses in the group’s Japanese alliance partner Nissan and the coronavirus hitting sales.

The company said group operating losses, factoring out the impact of Nissan’s losses, were at €2 billion, while its sales dropped 34.9%, with the global COVID-19 crisis being the main cause of the result.