Dollar and Euro Await ECB Meeting
The risk aversion that boosted the Greenback over the past week took a step back on Wednesday. The attempted push towards the 94 area faltered as it closed 0.32% lower.
Dollar bulls took a breather sending prices downwards as the focus shifts towards today’s ECB meeting.
The euro edged higher closing 0.16% up after a week of losses against the dollar. Whilst analysts expect the ECB to keep their policies steady, the attention will turn to Lagarde’s comments. The euro’s rise to a two year high recently affects the outlook for inflation and economic growth.
The outcome of the meeting will determine if the euro can maintain the 1.18 handle.
Emergency Talks Continue Over Brexit Divorce Bill
The pound steadied above a six-week low closing 0.16% higher yesterday.
But sterling could lose more ground due to the growing concern that Britain and the European Union will fail to agree on a trade deal.
Mr. Johnson’s proposal to override key parts of the Brexit withdrawal agreement has been met with negativity by the EU. Talks continue today with Northern Ireland’s hard border arrangement at the top of the agenda.
Has The Correction Ended?
US indices rebounded on Wednesday after a three-day sell-off.
Sentiment shifted once again as the equities market was encouraged over the decline in the dollar.
Leading the markets higher were the same stocks that drove the market lower over the past week. Shares of Apple, Microsoft, and Tesla climbed over 5% which assisted the ascension.
Safe Havens Encouraged
Gold finished 0.74% higher yesterday as it attempts to close in on $1950.
Risk appetite saw investors move on the dollar weakness, with further US-Sino tensions adding to the shift.
The fallout continues with President Trump’s comments of ‘decoupling’ from China. Most American companies that are based in China have declared they would prefer to stay in the country rather than being repatriated.
This sentiment was echoed on the yen as the USDJPY pair closed 0.15% higher on Wednesday.
Crude Oil Mixed on Headlines
WTI managed to close 3% higher on Wednesday despite renewed concerns over the demand for crude oil.
Oil prices were trading at their lowest levels since June as the API report released yesterday showed a build in crude oil inventories.
We now await today’s EIA figures to see if crude can retain the $38 handle.