What you need to know on Tuesday, July 20:
The dollar was driven by risk aversion, although gains were uneven against high-yielding rivals. Commodity-linked currencies were the worst performers, weighed down by the poor performance of stocks and commodities.
Wall Street had its worst day of the year, with the DJIA shedding more than 900 points intraday, recovering modestly thereafter. Global indices closed lower amid concerns over the Delta variant of the coronavirus and warming US inflation, which may force the local central bank to regain financial support earlier than expected.
The British pound was affected by the Brexit news. News at the weekend suggested that the UK will demand more flexibility from the EU on the Northern Ireland Protocol. UK Brexit Minister David Frost is said to be preparing an announcement on the matter this week. When asked about the protocol, Frost said it will always have to be a treaty due to Northern Ireland’s special situation, adding “the question is what is the content.”
Crude oil prices plummeted amid the bad mood and the announcement by OPEC +, which finally reached a deal to increase production, along with slowing demand. The WTI is trading at $ 66.30 a barrel.
The market’s bad mood is likely to continue in the coming sessions, ahead of the European Central Bank meeting next Thursday.