Market Roundup
- Oil gains following a drop in U.S. stocks
- Gold rises on weaker dollar
- Australia unemployment rate came in at at 7.5 percent
Economic Data Ahead
- No Major Economic Data Releases
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index plunged weighed down by a decline in Treasury yields, while President Donald Trump accused congressional Democrats of not wanting to negotiate over a U.S. coronavirus aid package. The greenback against a basket of currencies traded 0.3 percent down at 93.19, having touched a high of 93.91 on Wednesday, its highest since August 4.
EUR/USD: The euro rose, extending gains for the third straight session, as the European Central Bank flooded the system with so much liquidity that the rate at which banks borrow from each other, Euribor, is within a whisker of a record low. The European currency traded 0.4 percent higher at 1.1827, having touched a low of 1.1711 on Wednesday, its lowest since August 3. Investors’ attention will remain on a series of data from Eurozone economies, ahead of the U.S. unemployment benefit claims, export and import price index. Immediate resistance is located at 1.1848, a break above targets 1.1883. On the downside, support is seen at 1.1755, a break below could drag it below 1.1711.
USD/JPY: The dollar declined, hovering away from a near 3-week peak amid fading hopes for a compromise between Republicans and Democrats over additional stimulus for the U.S. economy. The major was trading 0.3 percent down at 106.63, having hit a high of 107.01 in the previous session, its highest since August 24. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, export and import price index. Immediate resistance is located at 107.22 a break above targets 107.54. On the downside, support is seen at 106.37, a break below could take it near at 106.15 (5-DMA).
GBP/USD: Sterling rose, halting a 2-day losing streak, as June’s GDP data offered hopes of recovery as restrictions eased and the economy began to recoup the losses, growing 8.7 percent month-on-month. The major traded 0.3 percent up at 1.3072, having hit a low of 1.3005 the day before, it’s lowest since August 4. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3110, a break above could take it near 1.3147. On the downside, support is seen at 1.3004, a break below targets 1.2977. Against the euro, the pound was trading 0.1 percent down at 90.15 pence, having hit a high of 89.69 on Tuesday, it’s highest since July 13.
AUD/USD: The Australian dollar advanced, extending gains for the second straight session, as the release of better-than-expected employment data eased concerns about a persistent coronavirus outbreak in the country’s second-largest city. The country's unemployment rate for July came in at 7.5 percent, lower than the expected 7.8 percent, while the economy added 114,700 jobs in July and the participation rate jumped to 64.7 percent. The Aussie trades 0.1 percent higher at 0.7168, having hit a low of 0.7109 the prior session, it’s lowest since August 4. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7197 a break above could take it near 0.7240. On the downside, support is seen at 0.7123 (21-DMA), a break below targets 0.7090.
Equities Recap
Asian shares rose as investors focus on positives out of recent economic data and bet on China and the United States sticking with their trade deal at a crucial weekend meeting.
MSCI’s broadest index of Asia-Pacific shares outside Japan nudged up 0.1 percent.
Tokyo's Nikkei rose 1.8 percent to 23,249.61 points, Australia's S&P/ASX 200 index declined 0.7 percent to 6,091.00 points. South Korea's KOSPI gained 0.2 percent to 2,437.53 points.
Shanghai composite index rose 0.05 percent to 3,320.73 points, while CSI 300 index traded 0.3 percent down at 4,635.71 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 25,220.16 points. Taiwan shares added 0.7 percent to 12,763.13 points.
Commodities Recap
Crude oil prices surged, extending previous session gains after U.S. government data showed a fall in inventories, supporting the view that fuel demand is returning despite the coronavirus pandemic. International benchmark Brent crude was trading 0.1 percent up at $45.33 per barrel by 0527 GMT, having hit a high of $45.76 on Tuesday, its highest since August 5. U.S. West Texas Intermediate was trading 0.2 percent higher at $42.63 a barrel, after rising as high as $42.92 on Tuesday, its highest since August 5.
Gold prices rose nearly 1 percent, drifting further away from a 3-week low on a softer dollar and worries over global economic fallout from mounting COVID-19 cases. Spot gold was trading 0.8 percent higher at $1,932.03 per ounce by 0314 GMT, having hit a low of $1862.89 on Wednesday, its lowest since July 22. U.S. gold futures eased 0.1 percent to $1,947.60.
Treasuries Recap
The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.667 percent.
