Asian markets turned lower in a nervy start to the new week. China shares were the outlier, trading flat despite industrial and retail data missing expectations. Central banks in Indonesia and Taiwan meet this week.

European shares are opening weaker. Fears of a second-wave are dampening the optimism surrounding several European counties opening borders to allow tourism today. The DAX has tumbled 400 points, taking it below the key 12,000 threshold after the weaker data from China hurt prospect of quick rebound in orders for German exporters. The FTSE 100 is the exception to the rule, pushing higher. A weaker Sterling is increasing the value of overseas profits accounted for in pounds.

Forex

The dollar is renewing its comeback, gaining against most major currencies with the exception of the yen. The yen-strength could be a consideration for the BOJ on the first of its 2-day policy meeting. The risk off environment that is keeping the dollar bid is weighing especially on Sterling as PM Boris Johnson fires up his PC for an online meeting with EU leaders. The weaker action in the pound would suggest few bets on another ‘Wirral pathway to a deal’ moment.

Commodities

The stronger dollar is pulling gold lower and oil is rolling over with waning expectations for global growth after the China data missed. It’s a low-key day on the economic calendar so the best hopes for the market to re-evaluate growth expectations could come from the NY Empire Manufacturing Index. New York City was one of the epicentres for the pandemic in the US and now businesses are closed again in fear of looting from bad some actors during protests.

Chart: CHF/JPY (2-years)

As the SNB and BOJ prepare to meet this week, the CHF/JPY currency pair has pulled back from 18-month resistance at 114.5. The exchange rate has been especially range bound this year as investors sought both currencies as a haven during the pandemic.

Author

Jasper Lawler

Trading Writers

With 18 years of trading experience, Jasper began his career as a stockbroker on Wall Street in New York City before sharpening his analytical skills at top trading firms in the City of London.

EUR/USD turns negative near 1.1850

EUR/USD has given up its earlier intraday gains on Thursday and is now struggling to hold above the 1.1850 area. The US Dollar is finding renewed support from a pick-up in risk aversion, while fresh market chatter suggesting Russia could be considering a return to the US Dollar system is also lending the Greenback an extra boost.

GBP/USD change course, nears 1.3600

GBP/USD gives away its daily gains and recedes toward the low-1.3600s on Thursday. Indeed, Cable now struggles to regain some upside traction on the back of the sudden bout of buying interest in the Greenback. In the meantime, investors continue to assess a string of underwhelming UK data releases released earlier in the day.