US Faces Continued Uncertainty
The US Index closed towards the low 93’s yesterday after rising for two days amidst positive PMI data.
Further uncertainty remains over the lack of progression on a new US coronavirus relief bill. Talks are expected to take their toll at the end of the week while 25mil unemployed people continue to weigh down on the dollar.
Eurozone Upbeat With PPI Results
The euro closed higher against the greenback on Tuesday, remaining above the 1.18 handle. The pair looks to be reversing the losses sustained at the back end of last week.
With the recent PPI data being revealed, industrial activity across the eurozone increased for the first time since January 2019.
Pound Keeps its Footing, but for How Long?
The pound closed indecisively again over the US dollar as doubts over the deadline for Brexit talks remain high.
The Prime Minister’s hope of people working back at their offices has faded as large firms imply that they will allow employees to keep working from home until 2021. This may come as an added blow to get the economy moving again.
However, the Chancellor’s plan to help the hospitality sector looks to be working. Half price meals in restaurants paid for by the treasury have gone down well with the general public.
As a result, we can expect the pair to produce another mixed session.
China-Aussie Exports Negate Tensions
The AUDUSD was up 0.35% on Wednesday as reports of a trade surplus with China improved the outlook of the economy.
Despite political and trade tensions between the two countries, exports to China hit a record A$14.6bn in June. Even though the state of Victoria remains ravaged by the COVID pandemic, the pair retained the push towards $0.72.
The Asian market started the session somewhat mixed on Wednesday after reports suggested that the US and China will meet to discuss phase-one.
US Indices Remain Bullish
US indices closed higher on Tuesday as they continued their ascendency on the back of positive corporate earnings reports. The SPX and Nasdaq rose 0.4%, whilst the Dow Jones increased by 0.6%.
Indices seemed to have ignored the ongoing stalemate between the Republicans and Democrats in regards to the fiscal relief package.
Gold Surges to Record Highs
The price of gold rose by 2.44% against the dollar, reaching an all-time high. The recent explosion in Beirut triggered fears of a potential attack, supporting the safe haven’s demand to $2,030.
As we see the tackling of the COVID pandemic, can gold affirm its grip over $2,000?
WTI Awaits EIA Report
Prices remained trading towards $42 on Wednesday. This comes as the recent API reports oil production in the US has now fallen from 13.1 million bdp from March, to 11.1 million bpd in July.
Investors await the EIA report later today to validate increasing demand.