Stock markets have managed to reverse at least some of the losses seen over the past 3 weeks, despite the headlines regarding a possible return to recession in the Eurozone after yesterday’s disappointing GDP numbers. Once again the focus is on the ECB, but at this point in time, to rely on further monetary stimulus to support the Eurozone economy is a very weak support and totally misses the structural issues that are adding to the weak growth outlook. Many European markets are closed today for the Assumption day holiday, so volumes will be light. Focus will remain on growth though, with the release of UK GDP data revisions. But scope for sterling recovery remains weak, given that there are no strong reasons to expect an upward revision and the focus has shifted to the weakness in wage growth.
Overnight, we’ve seen further creeping weakness on the yen, with the Aussie gaining further. We’ve seen AUDJPY move higher nearly every day this week, reversing the sharp fall seen Friday of last week and leaving us just shy of the 96.00 level which has marked an area of tough resistance throughout the year to date. There is some focus in Europe on the meeting of EU foreign ministers regarding events Iraq and the Ukraine, with the fears that the latter could well have a greater impact on growth numbers in the current quarter and exacerbate the weakness already seen in the Q2 data yesterday. Overall, currency markets look set to end the week on a quieter note, but underlying risks remain, especially in relation to events in the Ukraine, meaning that the higher levels of volatility gained over recent weeks are likely to remain for now.
FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.
Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.