Morning Market Review

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04/07/2020

EUR/USD

Today, during the Asian session, the EUR/USD pair is growing moderately, retreating from local lows, renewed yesterday. As before, the current EUR’s attempt to strengthen is technical, while the demand for it remains quite low. However, investors are optimistic about the reports of European countries, which indicate a decrease in cases of new infections with coronavirus, which gives some hope and supports the euro. Published macroeconomic statistics from Europe so far leaves much to be desired. So, the data on the dynamics of production orders in Germany released on Monday reflected a decrease of 1.4% MoM in February after an increase of 4.8% MoM in the previous month. Analysts had expected a decline of 1.9% MoM. According to preliminary estimates for April, the Sentix investor confidence indicator crashed from –17.1 to –42.9 points, which was noticeably worse than market expectations of –30.3 points. On Tuesday, investors are focused on German statistics on the dynamics of industrial production for February.

GBP/USD

Today, during the Asian session, the GBP/USD pair is growing, retreating from local lows of March 27. The pound grows after an uncertain decline last week, which forced him to retreat from highs since mid-March. Some pressure on the British currency has the hospitalization of Prime Minister Boris Johnson. Previously, he was self-isolated and worked remotely due to infection with coronavirus but later he was still forced to seek medical help. British macroeconomic statistics remain negative. So, on Monday the index of business activity in the construction sector came out, which fell from 52.6 to 39.3 points for March against the forecast of a decrease to 44 points.

AUD/USD

Today, during the Asian session, the AUD/USD pair is growing, continuing the development of the “bullish” momentum formed at the beginning of the week. Now, the instrument has added about 1% and is testing the level of 0.6150 for a breakout. On Tuesday, investors are focused on the publication of macroeconomic statistics from Australia, as well as the RBA decision on the interest rate. As expected, the Australian regulator did not change the parameters of monetary policy and kept the rate at a minimum level of 0.25%. The accompanying statement noted significant risks of a slowdown in the global economy due to the coronavirus pandemic. Published statistics reflected a sharp decline in the AiG index of activity in the service sector of Australia in March from 47 to 38.7 points. The vacancy index for the same period from ANZ fell 10.3% after rising 0.7% in February. Experts expected the appearance of negative dynamics but expected a decrease of only 2.9%.

USD/JPY

Today, during the Asian session, the USD/JPY pair significantly reduced, retreating from the local highs, renewed at the beginning of the week. Now, the instrument has lost about 0.4% and is testing the level of 108.70 for a breakdown. The yen is supported by some correction in the US currency and the publication of positive Japanese macroeconomic statistics for February. In turn, its more confident growth is hindered by fears of a state of emergency in the country today against the background of a sharp increase in the number of patients with coronavirus in Tokyo. Japan's matching indicators index in February rose from 95.2 to 95.8 points, which was better than market expectations of 95.1 points. The leading indicators index for the same period jumped from 90.5 to 92.1 points with a forecast of 90.4 points.

XAU/USD

Today, during the Asian session, gold prices are consolidating, retreating from local highs, which were renewed after a sharp increase in the instrument yesterday. The instrument is supported by the strengthening of alarming market sentiment due to a sharp slowdown in the global economy. The quarantine measures that many countries take today in connection with the spread of coronavirus have an extremely negative effect on almost all sectors of the economy, threatening the onset of a long period of recession or even depression. Demand for the dollar remains high but also suffers from the publication of disappointing data from the US, which indicates a record drop in the labor market, rising unemployment, and declining manufacturing activity.

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