EURUSD has plunged in the last 24 hours; the “greenback” is in demand.
The major currency pair plummeted. The current quote for the instrument is 1.0180.
Demand for “safe haven” assets went up and the USD took advantage of the situation.
Geopolitics, of course, is talking on the central stage. We’re talking about the speaker of the United States House of Representatives Nancy Pelosi visiting Taiwan. Pelosi is the third most important person in American politics, that’s why her arrival to the questionable and controversial Republic of China is considered a quite big highlight. Pelosi has already said that the US respects One China, but its solidarity with Taiwan is important like never before.
The US is interested in chip manufacturing, because Taiwan produces the biggest part of microchips for American industries. Pelosi emphasised that and said that the US CHIPS Plus Bill opens up opportunities for better economic cooperation.
This topic is quite controversial. The fact that China, despite being very aggressive, decided not to escalate the conflict is positive. On the other hand, China has to and will respond somehow, no one has any doubts about that.
Later in the afternoon, investors should pay attention to the Euro Area’s data on Services PMI in July and Retail Sales in June.
In the evening, the US will report on Factory Orders in June and ISM/Markit Services PMIs in July.