Market Roundup
- Gold slips as investors book profit
- Euro approaches 2-year high
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- (0500 ET/0900 GMT) ECB's De Guindos speech
FX Beat
DXY: The dollar index plunged to a 4-/1/2 month low, as investors keep a close watch on U.S. weekly jobless claims figures due later in the day for the latest indications of how the novel coronavirus pandemic has affected the American economy. The greenback against a basket of currencies traded 0.1 percent down at 94.88, having touched a low of 94.78 earlier, its lowest since March 9.
EUR/USD: The euro surged, hovering towards a 2-year peak hit above the 1.1600 handle in the prior session, following the EU's agreement on a 750 billion-euro recovery fund to share the debts incurred during the coronavirus crisis. The European currency traded 0.2 percent higher at 1.1590, having touched a high of 1.1601 on Wednesday, its highest since October 2018. Investors’ attention will remain on a series of data from Eurozone economies, ECB De Guindos speech and EZ consumer confidence figures, ahead of the U.S. employment benefit claims and Kansa Fed Manufacturing Activity. Immediate resistance is located at 1.1621, a break above targets 1.1655. On the downside, support is seen at 1.1540, a break below could drag it below 1.1511.
USD/JPY: The dollar eased as risk sentiment weakened amid escalation in tensions between Washington and Beijing after the United States gave China until Friday to close its consulate in Houston amid accusations of spying. Additionally, the United States reported more than 1,000 deaths from COVID-19 on Tuesday, the first time since June 10 the nation has surpassed that milestone. The major was trading 0.05 percent down at 107.13, having hit a high of 107.54 on Monday, its highest since July 8. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. employment benefit claims and Kansa Fed Manufacturing Activity. Immediate resistance is located at 107.36, a break above targets 107.80. On the downside, support is seen at 106.93, a break below could take it near at 106.38.
GBP/USD: Sterling held firm near 1-1/2 month peak, supported by the generally buoyant market mood which allowed investors to overlook poor British economic data and lack of concrete progress on Brexit trade talks. The major traded 0.05 percent up at 1.2748, having hit a high of 1.2768 on Tuesday, it’s highest since June 10. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2770, a break above could take it near 1.2820. On the downside, support is seen at 1.2780, a break below targets 1.2821. Against the euro, the pound was trading 0.1 percent down at 90.93 pence, having hit a high of 90.01 on Tuesday, it’s highest since July 13.
AUD/USD: The Australian dollar surged, hovering towards an over 1-1/2 year peak hit in the prior session, amid hopes for another round of U.S. stimulus measures. The Aussie trades 0.3 percent up at 0.7157, having hit a high of 0.7183 on Wednesday, it’s highest since late April 2019. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7232, a break above could take it near 0.7256. On the downside, support is seen at 0.7086, a break below targets 0.7049.
Equities Recap
Asian shares slumped amid a dramatic rise in tensions between the United States and China.
Tokyo's Nikkei declined 0.6 percent to 22,751.61 points, Australia's S&P/ASX 200 index rallied 0.3 percent to 6,094.50 points. South Korea's KOSPI eased 0.6 percent to 2,216.19 points.
Shanghai composite index fell 0.2 percent to 3,325.11 points, while CSI 300 index traded 0.05 percent down at 4,712.44 points.
Hong Kong’s Hang Seng traded 0.6 percent higher at 25,195.65 points. Taiwan shares shed 0.5 percent to 12,413.04 points.
Commodities Recap
Crude oil prices surged, although gains were limited by a surprise increase in U.S. crude oil reserves as the coronavirus pandemic hit fuel consumption. International benchmark Brent crude was trading 0.2 percent up at $44.34 per barrel by 0536 GMT, having hit a high of $44.86 on Tuesday, its highest since March 9. U.S. West Texas Intermediate was trading 0.1 percent higher at $41.92 a barrel, after rising as high as $42.49 on Tuesday, its highest since March 6.
Gold prices declined as investors booked profits from a strong rally, but held on to a near 9-year high due to U.S.-China tensions and speculation of more global stimulus to support pandemic-hit economies. Spot gold was trading 0.2 percent down at $1,868.92 per ounce by 0548 GMT, having hit a high of $1,876.84 earlier, its highest since September 2011. U.S. gold futures rose 0.1 percent to $1,867.
Treasuries Recap
The U.S. Treasury yields edged lower, with the benchmark 10-year note yield trading at 0.599 percent.
