FDA Announcement Improves Sentiment
The US index closed above 93 for a second consecutive day.
Investors were buoyed by the news that the US has authorized plasma coronavirus treatment. The FDA had concluded the treatment was safe after reviewing 20 thousand trials.
US PMI figures and existing home sales both exceeded expectations. This has allowed the greenback to gain momentum on its main rivals.
On Monday, Trump was officially nominated as the Republican nominee. This comes as the Republican National Convention officially kicked off. As Joe Biden still holds a commanding lead in all major polls, Trump continues to defend his handling of the pandemic.
The USPS came under the spotlight again at the convention. The US President stated that mail-in ballots could lead to voter fraud.
Will main-in voting make this “the most corrupt election” in US history?
PMI Flows Keep Pressure on Euro
Euro closed 0.05% lower against the dollar on Monday. The pair ended the session below the 1.18 mark.
The eurozone recovery stalled last Friday as PMI data fell short of economist expectations. Moreover, further localized lockdowns and renewed restrictions also weighed on sentiment.
As a result, negative flows from Friday’s PMIs kept the euro pressured.
Pound Closes Below $1.31
The pound was another casualty of a shift in sentiment on Monday. GBPUSD closed 0.13% lower and below the 1.31 big figure.
Concerns rose over employment in the UK as the latest PMI figures highlighted the growing pace of job cuts.
This followed the conclusion of the latest round of UK-EU Brexit talks on Friday. The EU’s chief negotiator Michel Barnier warned that the continued deadlock makes a post-Brexit trade deal ‘unlikely’.
US Indices Hit Further Highs
The US indices all closed higher on Monday on positive vaccine headlines.
The SP500 and the Nasdaq climbed for the fourth consecutive week now. Previous losses made by the coronavirus were wiped out.
Boeing was buoyed by the vaccination news as shares rose by 5% in the battle against Covid-19. The news has positively affected travel.
Dow officials decided to cut Pfizer and Exxon from the index. The changes were prompted by Apple’s 4-for-1 stock split aimed at reducing the index’s tech-sector weighting.
Bears Weigh in as Gold Fails to Bounce Back
Risk appetite shifted once again as gold closed 0.60% lower yesterday. It now trades closer to $1900 rather than its targeted $2000 range.
The recent FDA authorization to treat COVID patients using convalescent plasma weighed in on the yellow metal.
If the experimental testings prove unsuccessful, we could witness another surge to record highs.
Tropical Storms Threaten to Shake Up WTI
Oil closed indecisively once again as it maintained its grip above $42.
The two tropical storms Marco and Laura currently impacting America forced companies to shut down oil output.
We will await the API report later today for further clues.