Investors were disappointed by yesterday's EU finance minster teleconference. Finance ministers from the euro area met Thursday virtually. However, nothing fresh emerged about the proposed 750 billion euro recovery fund for economies hit hardest by Covid-19. Markets will now have to wait until July 17-18, for any further news about the fund.
Moreover, COVID cases continue to rise across the States, which is putting further pressure on US stocks. It looks like the broad indices peaked a month ago, while only the Nasdaq and tech sectors are pushing higher each day. This divergence can't last forever, and either the cyclical sectors need to start rallying, or the tech stocks should correct sharply lower.
The greenback and the yen advanced on Friday as risk-off flows tend to strengthen these currencies. The EURUSD pair fell below 1.13, and the USDJPY pair declined below 107. Commodity-linked currencies were also slammed.
The macro calendar will bring only Canadian labor market data, which will most likely influence the Canadian dollar. The USDCAD pair could rally toward 1.3715 if data disappoint.