A more timid approach to trading is happening on Thursday as markets digest strong gains from Wednesday. Fears of heightening US-China tensions and soft economic data are outweighing hopes for extra Fed stimulus and a joint-Euro area recovery fund.

Shares on Wall Street finished higher after Fed minutes opened the door to more policy stimulus- but the gains are not following through to Asia and Europe.

 

South Korea exports - a warning

A slump in South Korean exports in May is foretelling the kind of economic difficulty others can expect. Exports tumbled 20% May 1-20. The demand slowdown ran into a second month and serves to show the difficulty in returning to previous economic performance even as the worst of the pandemic passes. South Korea's larger Northern neighbour China is likely to suffer a similar fate and that has big repercussions for the global economy. Even if you have the virus under control in your own country, if you're exporting to countries that don't, your exports and your economy will suffer.

 

Lufthansa state rescue

German national carrier Lufthansa looks close to securing a state rescue of up to €9 billion. The package as reported would involve the German government becoming the top shareholder in Lufthansa. The government would gain a 20% stake via newly issued shares as well as a convertible bond worth another 5%. The shares gained on hopes for a deal that keep Lufthansa in business. The coming dilution of shareholder value after the deal will likely limit the upside

 

Euro making moves

The euro is edging up against major currencies including the dollar, pound and Swiss franc as PMIs released for France, Germany and the Eurozone. The single currency remains elevated on optimism for jointly-issued European debt. The chart below for EUR/CHF is one of a number of currency pairs showing

 

USD: fed minutes

The dollar has been gaining since Fed minutes dismissed the idea of negative US interest rates. Demand for the dollar has been bolstered by cooling market sentiment. The minutes are little stale since we've just heard fresher comments from Fed Chair Jerome Powell in his testimony to Congress this week.

 

Oil highest since March

The price of oil continues to surge in a return to price levels last seen in March. Oil prices continue to push higher after data showed a second weekly drop in US inventories. Both sides of the oil price squeeze have eased off. Demand is coming back slowly but surely as lockdowns gradually end and OPEC+ supply cuts as well as lower shale output has reduced the excess in supply.

 

Opening calls

Dow Jones to open 188 points lower at 24,387
S&P 500 to open 23 points lower at 2948

 

Chart: EUR/CHF (6-months)

EURCHF

This information has been prepared by London Capital Group Ltd (LCG). The material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. LCG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. Spread betting and CFD trading carry a high level of risk to your capital and can result in losses that exceed your initial deposit. They may not be suitable for everyone, so please ensure that you fully understand the risks involved.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD loses 1.1800 amid escalaing US-Sino tensions

EUR/USD dips sub-18 after the US reported an increase of 1.763 million jobs in July, better than estimated but pointing to a deceleration. Escalating Sino-American tensions are boosting the dollar and fiscal talks are eyed. 

EUR/USD News

GBP/USD resumes decline, weighed by UK concerns, US-China conflict

GBP/USD trades at fresh weekly lows below 1.3050 as the dollar got a sudden boost from mounting tensions between the world's two largest economies. UK Chancellor Rishi Sunak said the furlough scheme that is underpinning the economy cannot last forever.

GBP/USD News

XAU/USD drops $50 from record highs to the $2020 area

Gold prices are falling sharply on Friday, trading below $2040/oz at the moment. Earlier on Friday, the yellow metal reached at $2075, a new record high.

Gold News

Bitcoin may extend the recovery once Gold resumes the rally

Gold retreated from the recent highs, but the sentiments are still bullish. Cryptocurrencies resumed the upside, some altcoins are demonstrating strong gains. ETH/BTC stopped the downside correction and settled at $0.03300.

Read more

WTI extends slide toward $41, on track to post weekly gains

Crude oil prices continued to fall on Friday and the barrel of West Texas Intermediate (WTI) touched a daily low of $41.05 before recovering modestly.

Oil News

Forex Majors

Cryptocurrencies

Signatures