EUR/USD: Concerns about the US to boost the dollar and limit gains

EUR/USD is holding onto the high ground around 1.16 following upbeat eurozone PMIs but Sino-American tensions, US coronavirus figures and data may cap any gains, FXStreet’s analyst Yohay Elam informs.

Key quotes

“Markit's preliminary Purchasing Managers' Indexes for July all beat expectations, with the rebound in services more pronounced than in the manufacturing one. The data predates this week's EU agreement on a €750 billion recovery fund.”

“The safe-haven dollar may receive support from intensifying Sino-American tensions. China closed the US consulate in Chengdu, retaliation for America's move against Beijing's office in Houston. Secretary of State Mike Pompeo delivered a highly critical speech of China. While Pompeo pummeled Chinese President Xi Jinping, he stressed that the trade deal between the world's largest economies remains intact, providing some solace to investors.” 

“Republicans have dropped their demand for a payroll tax cut and Democrats will likely ease their demands to extend federal unemployment benefits at their entirety. The jobless receive a weekly top-up of $600 set to expire at the end of the month. That sum could be reduced.”

“The first half of June was upbeat but cases began rising in the latter part of the month and have continued causing concern since then. US infections topped four million and the daily death rate has topped 1,100 once again. Updated COVID-19 figures from states will have the last words of the week.”