The dollar has turned lower against major counterparts on Tuesday as investors continue to express optimism over the slowing growth in coronavirus cases in some countries. Also, markets bet on additional stimulus measures aimed at combating the negative economic consequences of the virus outbreak across the globe. The expected OPEC+ deal adds to the upbeat sentiment as well.
As such, the common currency managed to bounce from recent lows. Still, EURUSD struggled to challenge the 1.09 figure and has retreated partially since then. The fact that the euro lacks the upside momentum despite a broad-based dollar weakness suggests that the European currency lacks appeal among traders. On Monday, German Finance said that it will be issuing more debt in the second quarter than originally planned to finance the Corona Aid Programme.
GBPUSD bounced from more than one-week lows registered around 1.2160 earlier in the day and has challenged the 1.2350 region. Despite a local rally, the pair is still on the defensive as long as it stays below the key moving averages. On the downside, the cable needs to stay above the 1.21 level so that to avoid deeper losses if the pair fails to see a sustainable upside momentum in the near term.
As dollar demand has weakened, gold prices briefly jumped to nearly one-month highs around $1,671 earlier on the day. However, the precious metal failed to see sustained gains as traders decided to proceed to profit-taking amid the improved risk sentiment. Now, the bullion needs to stay above the $1,640 intermediate support in order to resume the ascent.
Meanwhile, oil prices have settled below $34 as traders prefer a cautious approach ahead of the OPEC+ negotiations due on Thursday. Despite the prices have bounced from the recent lows below $25, the market remains vulnerable as it’s too early to bet on coordinated OPEC measures aimed at supporting prices amid a dramatic decline in global energy demand because of the coronavirus outbreak. In the short term, Brent needs to see a decisive break above the $34 barrier in order to extend the recovery.