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Asia Roundup: Kiwi retreats from 2-week low as business confidence improves, Aussie rebounds as consumer sentiment rises, Asian shares plunge on tech selloff - Wednesday, September 9th, 2020

Market Roundup

  • Gold eases on stronger dollar
     
  • Oil slumps on growing coronavirus second wave concerns
     
  • Australia Westpac consumer sentiment rose 18 percent
     
  • New Zealand ANZ business confidence jumps to -26
     

Economic Data Ahead

  • No Major Economic Data Releases

Key Events Ahead

  • No Significant Events Scheduled

FX Beat

DXY: The dollar index held firm near a 4-week peak, amid Brexit concerns and bets that policy signals from the European Central Bank on Thursday could weigh on euro. The greenback against a basket of currencies traded up at 93.54, having touched a high of 93.58 earlier, its highest since August 12

EUR/USD: The euro steadied after tumbling to a near 3-week low earlier in the session, after a senior EU official stated that Eurozone finance ministers are likely to pledge lasting fiscal support to their economies on Friday. The European currency traded 0.05 percent higher at 1.1779, having touched a low of 1.1756 earlier, its lowest since August 21. Investors’ attention will remain on a series of data from the Eurozone economies ahead of the U.S. JOLTS Job Openings. Immediate resistance is located at 1.1810, a break above targets 1.1840. On the downside, support is seen at 1.1754, a break below could drag it below 1.1721.

USD/JPY: The dollar slumped to an over 1-week trough as risk sentiment weakened after a major drugmaker delayed testing of a coronavirus vaccine. AstraZeneca Plc paused a late-stage trial of one of the leading COVID-19 vaccine candidates due to an unexplained illness in a study participant. The major was trading 0.1 percent lower at 105.92, having hit a low of 105.82 earlier, its lowest since September 1. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. JOLTS Job Openings. Immediate resistance is located at 106.20, a break above targets 106.38. On the downside, support is seen at 106.63, a break below could take it near at 106.45.

GBP/USD: Sterling plunged to an over 1-month low amid growing fears that Britain is preparing to undercut its Brexit divorce treaty. The European Union has warned there will be no trade deal if Britain tries to override parts of the Withdrawal Agreement it signed in January. The major traded 0.1 percent down at 1.2968, having hit a low of 1.2950 earlier, it’s lowest since July 30. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3020, a break above could take it near 1.3053. On the downside, support is seen at 1.2931, a break below targets 1.2911. Against the euro, the pound was trading 0.2 percent down at 90.85 pence, having hit a low of 90.89 earlier, it’s lowest since July 28.

AUD/USD: The Australian dollar rebounded from a 2-week low after a measure of consumer sentiment surged as the coronavirus-stricken Victoria state managed to curb the spread of the disease while other states prevented a second wave. Westpac-Melbourne Institute index of Consumer Sentiment surged 18 percent to 94.8 in September from August, when it dropped 9.5 percent.  The Aussie trades 0.2 percent up at 0.7226, having hit a low of 0.7191 earlier, it’s lowest since August 26. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7253, a break above could take it near 0.7274. On the downside, support is seen at 0.7177, a break below targets 0.7150.

NZD/USD: The New Zealand dollar bounced back from a 2-week trough after a survey results from ANZ suggested that business confidence improved in September despite the lingering restrictions from the Covid-19 outbreak in Auckland. Preliminary reading of ANZ Business Outlook survey showed improvement in business confidence from -41.8 to -26.0, while activity outlook also rose from -17.5 to -9.9. The Kiwi trades 0.1 percent higher at 0.6624, having touched a low of 0.6601 earlier, its lowest level since August 27. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6651, a break above could take it near 0.6675. On the downside, support is seen at 0.6571, a break below could drag it below 0.6547.

Equities Recap

Asian shares slumped following a sell-off in U.S. technology shares that sank Wall Street for a third straight day.

MSCI’s broadest index of Asia-Pacific shares outside Japan plunged 1.1 percent.

Tokyo's Nikkei declined 0.9 percent to 23,047.20 points, Australia's S&P/ASX 200 index slumped 2.2 percent to 5,878.60 points. South Korea's KOSPI dropped 0.7 percent to 2,382.72 points.

Shanghai composite index fell 1.2 percent to 3,275.65 points, while CSI 300 index traded 1.7 percent up at 4,613.42 points.

Hong Kong’s Hang Seng traded 0.9 percent lower at 24,418.30 points. Taiwan shares shed 0.4 percent to 12,603.58 points.

Commodities Recap

Crude oil prices plunged to their lowest level since June as coronavirus cases surged in several countries, threatening hopes for a global economic recovery that could impact fuel demand. International benchmark Brent crude was trading 0.7 percent down at $39.57 per barrel by 0503 GMT, having hit a low of $39.29 on Tuesday, its lowest since June 16. U.S. West Texas Intermediate was trading 0.6 percent lower at $36.52 a barrel, after falling as low as $36.15 on Tuesday, its lowest since June 15.

Gold prices declined as a stronger dollar offset lingering economic concerns, while markets await the European Central Bank meeting outcome for further cues on the monetary policy outlook. Spot gold was trading 0.1 percent lower at $1,929.92 per ounce by 0509 GMT, having hit a low of $1906.62 on Tuesday, its lowest since August 12. U.S. gold futures fell 0.3 percent to $1,937.50.

Treasuries Recap

The U.S. Treasury yields eased, with the benchmark 10-year note yield trading at 0.667 percent.

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