Forex Today: Fears rule, dollar wins

What you need to know on Tuesday, July 20:

The dollar was boosted by risk aversion, although gains were uneven against high-yielding rivals. Commodity-linked currencies were the worst performers, weighed by the poor performance of stocks and commodities.

Wall Street had its worst day for the year, with the DJIA shedding over 900 points intraday, recovering just modestly afterwards. Global indexes closed in the red amid concerns related to the coronavirus Delta variant, and heating US inflation which may force the local central bank to retrieve financial support sooner than anticipated.

The British pound was hit by Brexit news. News over the weekend suggested that the UK will demand the EU more flexibility over the Northern Ireland Protocol. UK Brexit Minister David Frost is said to be preparing an announcement on the matter this week. When asked about the protocol, Frost said that it will always have to be a treaty due to the special situation of Northern Ireland, adding that “the question is what is the content.”

Crude oil prices plunged amid the dismal mood, and the announcement of the OPEC+, which finally reached a deal to increase output, coupled with slowing demand. WTI trades at $66.30 a barrel.

The dismal market mood is likely to continue in the upcoming sessions, heading into the European Central Bank meeting next Thursday.

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