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The dollar strength continued to dominate most of the currency markets with even the Japanese yen by now also declining against the greenback. Emerging market currencies also felt the pressure from this move. The USD/TRY pair rose to yet another all-time high. However, given the stable EUR/TRY rate at just below 9.0, this could be for the time being be attributed mostly just to the strength of the dollar.After the 3 per cent move on Monday, the USD/ZAR pair stabilized trading only marginally higher, while maintaining a position below the rate seen at the end of August.While key global stock indices managed to stabilize after the steep losses on Monday, the sentiment was still quite mixed. For once, Japanese and especially tech oriented US indices like the US TECH 100 managed to close higher on Tuesday, in Europe the sentiment was quite mixed. The Europe 50 index merely consolidated its position, while further losses were recorded in indices like the Spain 35 or France 40 as the increased number of confirmed coronavirus infections makes governments to reconsider re-imposing more strict restrictions.On Wednesday weekly EIA oil market data will be published, as well as the FHFA House Price Index and manufacturing and services PMI statistics from the EU and the US. Furthermore speeches from two FOMC members in addition to the continuing testimony of the Chairman of the Federal Reserve in front of the US House of Representatives will take place.
As the dollar strength persisted in the market, the EUR/USD pair was also affected, falling below the 1.17-threshold for the first time since early August. This comes despite the euro overall not significantly weakening against other major currencies with a clear uptrend even seen over the past few days in pairs like the EUR/GBP or the EUR/AUD.One of the key reasons for the new movement towards a stronger dollar could have been the comment from the Chicago Fed President Charles Evans, who indicated that the Fed might tighten its monetary policy even before the new average benchmark for the target of 2% is fully reached. Others have however pointed out that this statement is still quite vague and the Fed’s Chairman recent comments indicated rates near zero until 2023.On Wednesday manufacturing and services PMI statistics will be released for Germany, the United States and the EU.
Gold, silver and other precious metals continued trailing lower, with gold again falling below the $1,900-threshold. While the dollar strongly appreciated over the past few days, no significant movements were seen in the 10-year US Treasury Note yield benchmark.While other markets seemed to be stabilizing for now, gold touched by Wednesday morning on the intra-day low from Monday. Some analysts see the demand for cash due to the current uncertainties as a contributing factor for the weakness of the gold price.
Oil prices settled yet again lower on Tuesday but compared to Monday, the price drop was rather small. The market price might have been supported by the weekly API report, which indicated that to the analysts’ surprise the weekly draw on gasoline stockpiles reached 7.7 million barrels.In terms of demand and supply there have also been reports which could have influenced the markets, such as a report from Reuters that the estimated amount of oil added to the Chinese stockpiles further decreased. On the supply side reports indicate that following the lifting of the oil export blockade, Libya might be able to export 260 thousand barrels per day by next week.On Wednesday the Energy Information Administration (EIA) publishes its weekly crude oil, gasoline and distillate stockpiles statistics.
Key US stock market indices closed overall higher on Tuesday, recovering practically completely from the losses sustained in the trading session on Monday. Analysts explained this move with the current market uncertainty as many are still not sure whether market prices could continue to decline or whether this could be seen as a good opportunity to buy. The continued impact of the coronavirus pandemic and also uncertain outcome of the US Presidential election could be affecting the markets in these days.Shares of the sport apparel company Nike traded more the 13 per cent high in after-hours trading following better-than-expected earnings as digital sales improved by 82% and sales in China were up by 6%. Earnings-per-share at 95 cents were more than double of what analysts have expected.On Wednesday the monthly FHFA House Price Index statistic will be published, as well as weekly data from the Mortgage Bankers’ Association (MBA).
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