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Europe Roundup: Sterling falls to 6-week low vs dollar, European shares inch higher, Gold falls, Oil prices reverse some losses but demand concerns persist-September 9th,2020

Market Roundup

•Swiss Aug Unemployment Rate n.s.a.  3.3%,3.3% forecast, 3.2% previous

•Swiss Aug Unemployment Rate s.a.  3.4%,3.4% forecast, 3.3% previous

•Greek Jul  Industrial Production (YoY)  -0.2%,-4.9% previous

•Portuguese Jul Trade Balance  -5.35B, -5.31B previous

•US Mortgage Refinance Index 3,415.1, 3,316.2 previous

•US MBA Purchase Index 317.7, 309.6 previous

•US Mortgage Market Index 776.7, 755.1 previous

•US MBA Mortgage Applications (WoW) 2.9%,-2.0% previous

•US MBA 30-Year Mortgage Rate 3.07%,3.08%   previous

Looking Ahead - Economic Data (GMT)

•12:30 Canada Aug Housing Starts   220.0K forecast, 245.6K previous

•12:55 US Redbook (MoM) 5.8% previous

•12:55 US Redbook (YoY) 4.6% previous

•13:00 Brazilian Aug IPCA Inflation Index SA (MoM)  0.44% previous

•13:00 Brazilian CPI (MoM)  0.23%,0.36% previous

•13:00 Russia GDP Quarterly (YoY) (Q2) -8.5% forecast, 1.6% previous

•13:00 Greek Jul Credit Expansion (YoY)  8.2%,4.0% previous

•14:00 Canada BoC Interest Rate Decision 0.25% forecast, 0.25% previous

•14:00 US Jul JOLTs Job Openings   6.000M forecast,, 5.889M previous

•14:30 US Cushing Crude Oil Inventories 0.110M previous

Looking Ahead - Events, Other Releases (GMT)

•14:00 Canada BoC Rate Statement

Fxbeat

EUR/USD: The euro declined against dollar on Wednesday as investors awaited Thursday's European Central Bank meeting with some trepidation. The common currency has lost about 2% since posting a 28-month high above $1.20 on Sept. 1, spurred lower by comments from ECB chief economist Philip Lane who said the exchange rate mattered to monetary policy. Any hint of concern at the currency's rise, or that low inflation will require ultra-easy policy for a very long time could whack the euro lower again and boost the dollar.  Immediate resistance can be seen at 1.1810 (50%fib), an upside break can trigger rise towards 1.1843 (11 DMA).On the downside, immediate support is seen at 1.1754 (Daily low), a break below could take the pair towards 1.1732 (38.2% fib ).

GBP/USD: The pound fell to its lowest level in six weeks against the dollar on Wednesday as new legislation by the British government on the country’s post-Brexit plans stoked fears of a derailment of trade talks with the European Union. Britain will set out new details of its blueprint for life outside the bloc later on Wednesday, publishing legislation a government minister acknowledged would break international law in a  limited way , and which could sour trade talks. The pound fell to $1.2919, its lowest level since July 29 in early London trading. It last traded at $1.2949, down 0.2% on the day. Immediate resistance can be seen at 1.2950 (38.2%fib), an upside break can trigger rise towards 1.3045 (50% fib).On the downside, immediate support is seen at 1.2886 (Daily low), a break below could take the pair towards 1.2800 (Psychological level).

USD/CHF: The dollar strengthened against the Swiss franc on Wednesday as renewed fears about Brexit boosted safe-harbour demand for the greenback. The U.S. dollar also found some support as the stock market slide spooked investors, while worries about the fate of Brexit talks pushed the pound down to a new six-week low. Traders, returning from summer holidays, are faced with a bouquet of risk factors as they enter the autumn period of trading - the U.S. election in November, Brexit, U.S.-China trade tensions, central bank policy decisions, rising cases of the coronavirus  many of which would dent the appetite for riskier assets and inject strength into safe-havens. Immediate resistance can be seen at 0.9199 (38.2%fib), an upside break can trigger rise towards 0.9228 (50DMA).On the downside, immediate support is seen at 0.9146  (5DMA), a break below could take the pair towards 0.9119 (23.6% fib).

USD/JPY: The dollar declined against the Japanese yen on Wednesday as renewed escalation in tensions between the U.S. and China and a sell-off in the equity markets increased demand for yen. While European shares bounced back a bit, sentiment remains fragile after a sharp selloff in Wall Street and as AstraZeneca halted trials of its COVID-19 vaccine. Investors now await the outcome of the European Central Bank’s policy meeting due on Thursday and the Bank of Canada’s policy meeting on Wednesday. The Japanese yen climbed to a one-week high as investors sought safety, before giving up some of its gains to last stand 0.1% up at 106.21 per dollar. Strong resistance can be seen at 106.43 (55DMA), an upside break can trigger rise towards 106.82 (50%fib).On the downside, immediate support is seen at 105.79 (Daily low), a break below could take the pair towards 105.54  (38.2%fib).

Equities Recap

European shares steadied on Wednesday after hefty declines in the previous session, although sentiment was rattled by AstraZeneca suspending global trials for its COVID-19 vaccine.

At (GMT 12:10 ),UK's benchmark FTSE 100 was last trading up at 0.97 percent, Germany's Dax was up  by 1.13 percent, France’s CAC finished was up by 0.75 percent.

Commodities Recap

Gold eased on Wednesday on a firm dollar and as some investors sold bullion to offset losses from a recent selloff in equities, but worries about a delay in the development of a coronavirus vaccine limited the metal’s declines.

Spot gold fell 0.5% to $1,922.21 per ounce by 1056 GMT. U.S. gold futures fell 0.7% to $1,928.90.

Oil futures clawed back some of the losses they sustained in the previous session, but a rebound in COVID-19 cases in some countries undermined hopes for a steady recovery in global demand.

Brent crude  was up 20 cents, or 0.5%, at $39.98 a barrel by 1119 GMT after dropping more than 5% on Tuesday to fall below $40 a barrel for the first time since June.

U.S. crude  was up 42 cents, or 1.1%, at $37.18 a barrel, having fallen nearly 8% in the previous session.

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