News

Europe Roundup: Euro struggles near three-year lows on economic worries, European shares gain, Gold holds near two-week high, Oil price steady-February 17th,2020

Market Roundup

• Euro near 33-month low as growth stagnates in euro zone

• Market sees soft US data as driven by one-off factors

Looking Ahead – Economic Data (GMT)    

• 13:00 Russia Jan Industrial Production (YoY) 1.7% forecast 2.1% previous      
 
• 13:30 Canada Dec Foreign Securities Purchases -1.75B previous
            
•13:30 Foreign Securities Purchases by Canadians 5.55B previous  
 
Looking Ahead – Economic events and other releases  (GMT)    

• No significant events

Fxbeat

EUR/USD: The euro struggled near 3-year lows against dollar on Monday as investors worried about damage from a coronavirus outbreak and weak economic growth in Eurozone. Traders are looking to a German business sentiment indicator due on Tuesday and purchasing managers index flash data later this week for further evidence on the state of the euro zone economy. The euro was up 0.10 percent at $1.0840. Immediate resistance can be seen at 1.0861 (5 DMA), an upside break can trigger rise towards 1.0904 (9 DMA).On the downside, immediate support is seen at 1.0820 (Lower BB), a break below could take the pair towards 1.0800 (Psychological level).

GBP/USD: Sterling dipped against dollar on Monday, as investors priced in looser financial conditions under Britain’s new finance minister. Rishi Sunak was appointed on Thursday when incumbent Sajid Javid unexpectedly quit as Prime Minister Boris Johnson reshuffled his cabinet. Later this week, traders will be watching the February flash composite purchasing managers’ index data, which could serve as a guideline to the Bank of England’s future monetary policy. Immediate resistance can be seen at 1.3071  (50 DMA), an upside break can trigger rise towards 1.3100 (Psychological level).On the downside, immediate support is seen at 1.2978  (9 DMA), a break below could take the pair towards 1.2920 (100 DMA).

USD/CHF: The dollar strengthened against the Swiss franc on Monday, as the promise of further policy stimulus to counteract the economic hit from a coronavirus outbreak calmed nervous investors. Trading is expected to be light, with U.S. stocks and bond markets shut for a public holiday. At (GMT 12:16), Greenback gained 0.1% versus the Swiss franc to 0.9818. Immediate resistance can be seen at 0.9837 (100 DMA), an upside break can trigger rise towards 0.9878 (Dec 12th high).On the downside, immediate support is seen at 0.9793 (5 DMA), a break below could take the pair towards 0.9757 (11 DMA).

USD/JPY: The dollar strengthened against the Japanese yen on Monday, as worse-than-expected economic contraction in the December quarter weiged on Japanese yen. Japan’s economy contracted at an annualised pace of 6.3% in the October-December period, data showed on Monday, shrinking at the fastest pace in almost six years and raising the risk it could again slide into recession. Economists’ median estimate was for a 3.7% contraction. Strong resistance can be seen at 110.14 (12th Feb high), an upside break can trigger rise towards 110.38 (Higher BB).On the downside, immediate support is seen at 109.68 (11 DMA), a break below could take the pair towards 109.31 (50 DMA). 

Equities Recap

European shares inched higher on Monday as fresh attempts by China to limit the economic impact of the coronavirus outbreak helped calm investor nerves.

At (GMT 12:50),UK's benchmark FTSE 100 was last trading up at 0.29 percent, Germany's Dax was down by 0.10percent, France’s CAC finished was up by 0.11 percent.

Commodities Recap

Gold prices on Monday held near a two-week high scaled in the previous session as uncertainty prevailed over the impact of the coronavirus outbreak on the global economy.

Spot gold was little changed at $1,582.08 per ounce, as of 0701 GMT, having touched its highest since Feb. 3 at $1,584.65 on Friday. U.S. gold futures were down about 0.1% at $1,585.30.

Oil prices were little changed on Monday as concerns over the economic fallout from the coronavirus outbreak in China were offset by hopes that potential output cuts from major producers could tighten crude supply.

Brent crude was at $57.24 a barrel, down 8 cents, by 1140 GMT after rising 5.2% last week, its biggest weekly gain since September 2019.

U.S. West Texas Intermediate crude rose 2 cents to $52.07 a barrel, after a 3.4% gain last week.

Treasuries Recap

U.S.: U.S. market remains closed today on account of Washington’s Birthday.

UK: The United Kingdom’s steadied during European trading hours Monday ahead of the country’s employment report for the month of December, scheduled to be released on February 18 by 09:30GMT. The yield on the benchmark 10-year gilts, remained flat at 0.625 percent, the 30-year yield remained tad down at 1.107 percent and the yield on the short-term 2-year remained range-bound at 0.532 percent

EUR: The German bunds remained nearly flat during afternoon session Monday amid a muted trading day that witnessed data of little economic significance ahead of the country’s ZEW economic sentiment for the month of February, scheduled to be released on February 18 by 10:00GMT. The German 10-year bond yield, which move inversely to its price, hovered around 0.403 percent, the long-term 30-year yield remained flat at 0.115 percent and the yield on short-term 2-year too remained steady at -0.656 percent.

AUS: The Australian bonds edged tad higher during morning hours of the first trading day of the week Monday ahead of the Reserve Bank of Australia’s (RBA) February monetary policy meeting minutes, scheduled to be released on February 18 by 00:30GMT and the country’s labour market report for the month of January, due on February 20. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped nearly 1/2 basis point to 1.069 percent, the yield on the long-term 30-year bond also fell 1 basis point to 1.672 percent and the yield on short-term 2-year remained nearly flat at 0.762 percent.
 


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