Forex Today: Delta covid variant, inflation fears weigh on mood, OPEC+ deal sinks oil

Here is what you need to know on Monday, July 19:

Global markets are on the back foot on a mix of concerns about the spread of the Delta covid variant and worries that inflation would force rate hikes. OPEC+ agreed to increase output after protracted talks and the UK opens up. 

Risk-off: Shares are on the retreat, extending Friday's decline that was partially triggered by disappointing consumer sentiment figures. The University of Michigan's figures showed shoppers are less confident and they expect higher inflation. Earlier last week, consumer prices surprised to the upside.

US 10-year Treasury yields dropped below 1.30%, but the dollar has failed to take full advantage of that. The safe-haven yen is advancing, despite worries about the safety of the Tokyo Olympics, set to start on Friday. 

The Delta strain of COVID-19 continues spreading quickly all over the world, adding to the damp mood, with the Aussie dollar standing out with a drop under 0.74. Lockdowns in Sydney and Melbourne cause economists to downgrade their economic forecasts and push back against estimates about when the Reserve Bank of Australia raises rates. 

Oil: Saudi Arabia and the UAE resolved a weeks-long dispute about quotas and agreed with their OPEC+ members to raise output by 400 thousand barrels per day. WTI Crude Oil dropped to $71 after the agreement was announced. 

GBP/USD is hovering around 1.3750 as the UK removes almost all covid-related restrictions on "Freedom Day." However, Britain has been reporting a high level of around 50,000 cases per day and many people have been called to self-isolate after coming in contact with infected individuals. 

EUR/USD is clinging to 1.18 as speculation mounts ahead of Thursday's European Central Bank decision, the first under the ECB's new framework. 

Cryptocurrencies have consolidated around lower levels, with Bitcoin pressured under $32,000 and Ethereum hovering around $1,900. 

Gold is edging lower but holding above $1,800, failing to benefit from the doop in Treasury yields.

Gold Price Forecast: Corrective decline likely to resume amid risk-off mood, bear pennant