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Greenback dips in EUR/USD pair

Greenback dips in EUR/USD as corporate earnings season begins

The US corporate earnings season began in earnest on Monday – leading to problems for the US dollar in the process.

The corporate earnings reporting period takes place four times a year as each quarter ends – and the current period is exceptionally important given the ongoing levels of concern around the impact that the pandemic has had on the US economy.

An announcement from Refinitiv appeared set to suggest that Q2 2020 will show the second-largest quarter-on-quarter decline since 1968.

However, in a complicated picture, some corporations appeared to provide stronger reports than expected.

PepsiCo Inc., for example, revealed a higher level of earnings than had been forecast by some.

This led to a rise in the value of major American stock markets.

The Dow, for example, went up by more than a whole percentage point as trading kicked off on Monday.

With this information in the market’s possession, the dollar index, which is an artificial metric used by traders to bring together the dollar’s performance against several other global currencies, was down.

It dipped by 0.31% at one stage over the course of Monday.

This was part of a larger trend, however.

The currency has gone down in value weekly for three weeks in a row following a growing sense in the forex markets that the coronavirus pandemic’s impact could be coming to a close.

The dollar was in demand for a long time during the worst of the pandemic due to the ease with which it can be converted into cash.

The greenback is set to face more challenges later in the week, however.

On Tuesday, for example, traders will have to contend with a consumer price index release from the country.

There will also be reporting information from more major corporations on Tuesday.

Citigroup and JPMorgan, both major players in the financial services sector, will issue their reports.

This will be followed on Thursday by a release looking at retail sales data.

On Friday, finally, a hat-trick of consumer-related information will be completed with a consumer sentiment data release.

According to analysts, the releases are significant given the fact that consumers are highly important to the US economy.

The question marks over the dollar’s performance meant that other currencies from across the globe were able to sweep in and clear up.

The single European currency, for example, went up significantly in its pair against the greenback.

It was spotted up by just over three-fifths of a percentage point at one stage, reaching $1.137.

Overall, it has been in a buoyant mood for a number of weeks now.

It appeared on Monday that it may strike its best performance since the middle of last month.

However, the currency will also have to deal with some hurdles this week, including a meeting of government leaders from across the bloc.

At this meeting, there will be some controversial topics on the agenda, including the EU’s financial plans for the next few years.

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