US dollarEconomic data from Europe was more positive Friday, as U.K. retail sales rebounded in June, climbing 13.9% on the month. European PMI data later in the session should paint a constructive picture, suggesting the gradual recovery is continuing.

On the other hand, the economic recovery in the U.S. is in question as the world’s largest economy and main driver, after Thursday saw the first rise in the number of Americans filing for unemployment claims since the last week in March, as some states rolled back reopening because of the pandemic. COVID-19 numbers continue a relentless march, with over 15.5 million cases globally as of July 24, according to Johns Hopkins University data, and over 4 million cases in the U.S. alone.

Meanwhile, China ordered the United States to close its consulate in the city of Chengdu on Friday, responding to being told to shut its consulate in Houston earlier this week.

EUR/USD has been consolidating its gains above 1.16 after hitting the highest since 2018 and GBP/USD possibly looks to move up toward 1.2750. USD/JPY drops to fresh 1-month lows, around 106.30 region.

Oil prices edged higher on Friday on the back of a weaker U.S. dollar, although demand concerns stemming from rising coronavirus cases and escalating U.S.-China tensions kept a cap on prices.

Gold was down on Friday morning, taking a break from five days of increases that have taken prices close to all-time highs set in 2011.

The key PMI Reports from Eurozone and the UK will be closely watched in the session ahead. Moving forward, the US economic docket sees the releases of flash PMI prints and New Home Sales data, that might influence the USD price dynamics and produce some meaningful trading opportunities on the last day of the week.