The U.S. dollar has recovered moderately in early European trade Thursday, reversing earlier losses, but the long-term prognosis for the greenback continues to look less healthy. China reported a 3.2% growth in its second-quarter GDP year-on-year, a sharp bounce back from the first quarter’s 6.8% contraction, although the yuan weakened slightly as monthly data showed a surprising drop in retail sales that suggested ongoing weakness in consumer demand. Meanwhile, U.S. President Donald Trump privately ruled out further sanctions against Chinese entities involved in enacting Hong Kong’s national security laws on Wednesday, attempting to diffuse escalating U.S.-China tensions. But tensions remain in place, with China threatening to retaliate after Trump also stripped Hong Kong of its special trading privileges and signed an executive order for initial sanctions on Tuesday.
Gold was down on Thursday morning in Asia, with investors retreating from the safe-haven asset over continued hopes of a COVID-19 vaccine. Russia also successfully completed early stage trials of a COVID-19 vaccine. Developed by the First Moscow State Medical University and the Main Military Clinical Burdenko Hospital, the vaccine reported positive preliminary results on Wednesday.