Equities Surge on China Comments
Orbex Market Flash
USD Higher Ahead of Key Data
The US dollar has continued its ascent over the European session so far on Thursday. Following a sharp sell off on Friday, the USD index has now retraced most of its losses, trading 98.22 last. Earlier in the week, consumer confidence data came in better than expected and traders now await GDP and trade balance data due later today.
EUR Under Pressure
EURUSD remains under pressure today in light of the continued recovery rally in USD. Earlier today a raft of eurozone member nation data came in mixed with French GDP coming in above expectations while German unemployment ticked higher. EURUSD trades 1.1075 last, with price remaining below the 1.1112 level for now.
UK Parliamentary Suspension Weighs on GBP
GBPUSD has continued to sell off today as the market digests news that the Queen has approved the UK PM’s request to suspend parliament. The backlash from UK politicians has been severe with a group of opposition MPs forming an alternative parliament and pledging to block a no-deal Brexit. GBPUSD trades 1.2198 last as the recovery back towards 1.2382 loses momentum.
Risk assets have seen a boost today with the SPX500 exploding higher over the session so far. The buying has been in response to the release of a statement from the Chinese Ministry of Commerce. The statement read that the Ministry will not immediately react to US tariffs when they start on Sunday, outlining its desire to end the trade war calmly. SPX500 trades 2914.43 last with price nearly back at the 2931.44 level.
Safe Havens Slump
Safe havens have come under pressure today in light of the recovery in risk sentiment, which has weighed on JPY and gold. USDJPY trades 106.21 last, with price having tested the 106.29 resistance which is holding for now. XAUUSD trades 1539.83 last, with price still holding above the 1522.75 level for now.
Oil Rallies on China Hopes
Oil prices remain supported today following the latest EIA report yesterday which confirmed a 10 million barrel drawdown in US crude stores last week. The move has helped dampen concerns over the demand outlook, despite also showing US crude production to have surged to fresh all-time highs. Crude has also been boosted by the more moderate tone from China which has boosted optimism regarding the next round of US-China trade talks to be held in September. Crude trades 56.05 last, with price currently testing the bearish trend line from July highs.
Commodity Currencies Bounce Back
USDCAD has seen a sharp reversal over the session so far today. The news from China and subsequent lift in equities and oil prices have boosted CAD, taking USDCAD back firmly below the 1.33 level to trade 1.3284 last.
AUDUSD has also been firmer over the European morning on Thursday. AUD has been weighed down by trade war concerns and optimism around negotiations is helping lift AUD today. Price is trading .6750 last, though still below the .6758 level for now.