Forex News Roundup For June 24th, 2020

Forex News Roundup: GBP Falls Slightly Against USD, Greenback Surges Against Middle Eastern Currencies

Currency Converter Calculator's Forex News Roundup is a great way for FX traders and investing enthusiasts to stay up to date with the latest happenings and developments in the global currency exchange market.

In this edition, it's mainly good news for the US Dollar (USD), with the Greenback gaining on most of its currency rivals – albeit by varying degrees.

GBP Marginally Falls Against USD

The Great British Pound (GBP) has slightly fallen against the US Dollar following Prime Minister Boris Johnson’s announced plans to ease social distancing measures across the UK, as he looks to help get companies – particularly in the services sector – back in business to avoid bankruptcies and redundancies.

Most importantly, PM Johnson announced that the 2-meter social distancing rule would be halved and therefore many businesses, including restaurants, bars, and pubs, could reopen from July 4.

Specifically, the GBP fell by 0.06 percent before recovering. It is now trading at around 1.25 against the US Dollar after gradually climbing throughout the week. It remains slightly off the June high of 1.27 which we saw for a few days in the second week of June.

Brexit negotiations scheduled for next week are another development that FX traders will be keeping a close eye on, as the outcome could lead to significant price movements for the GBP against the Euro (EUR) and the Greenback.

USD Surges in Some Middle Eastern Countries

The US Dollar has continued to rapidly appreciate in a select few Middle Eastern countries as some regional states continue to be plagued with domestic political and economic turmoil. A single US Dollar is now worth approximately 6,000 Lebanese Dollars, and it’s a similar story for the Syrian Pound (SYP), with the exchange rate exceeding the 2,500 mark.

Keep in mind, however, that the exchange of Syrian Pounds into Dollars is done on the black market in Syria, due to international sanctions which have outlawed trade with much of the outside world and crippled the domestic economy.

Other Middle Eastern currencies have remained relatively flat to the USD in recent days, though, as demonstrated throughout this crisis, Emerging Market (EM) currencies remain vulnerable to negative US economic data, which usually results in investors flocking to safety and dumping their holdings of risky assets.

New Zealand Dollar Falls After RBNZ Warning

The New Zealand Dollar fell by 0.8 percent on Tuesday after the Reserve Bank of New Zealand (RBNZ) said it is still “prepared to provide additional stimulus as necessary”, though the committee voted to keep the official cash rate (OCR) at 0.25 percent.

A further reduction in the official cash rate would make it less attractive for investors to hold savings in banks in the country, as they would be generating a lower return – and this lower demand is likely to drive down the value of the New Zealand Dollar.

The ongoing trade war between the US and China has also proved to be an important factor in determining the New Zealand Dollar’s relative value to other currencies, so investors and traders should keep an eye on how this progresses as well.

A Quick Summary

• The GBP fell by around 0.06 percent against the USD following PM Johnson's announced plans to reduce social distancing measures in the country on July 4 in a bid to help kickstart the economy and save jobs and businesses.
• The US Dollar has also been appreciating against a few Middle Eastern currencies – the Lebanese Dollar in particular – as domestic turmoil continues to plague the country.
• Meanwhile, the New Zealand Dollar fell by almost one percent after its central bank said it was prepared to lower interest rates to bolster demand in the economy.