News

Asia Roundup: Dollar steadies near 2-year low as investors turn to Congress for stimulus, Asian shares surge, markets await EZ economic data – Thursday, July 30th, 2020

Market Roundup

  • Oil declines on demand concerns
  • Gold eases as risk appetite improves

Economic Data Ahead

  • (0400 ET/0800 GMT) Italy Unemployment(Jun)
  • (0400 ET/0800 GMT) Germany Gross Domestic Product w.d.a (YoY)(Q2) PREL
  • (0400 ET/0800 GMT) Germany Gross Domestic Product (QoQ)(Q2) PREL
  • (0400 ET/0800 GMT) Germany Gross Domestic Product (YoY)(Q2) PREL
  • (0500 ET/0900 GMT) EZ Services Sentiment(Jul)
  • (0500 ET/0900 GMT) EZ Consumer Confidence(Jul)
  • (0500 ET/0900 GMT) EZ Industrial Confidence(Jul)
  • (0500 ET/0900 GMT) EZ Business Climate(Jul)
  • (0500 ET/0900 GMT) EZ Economic Sentiment Indicator(Jul)
  • (0500 ET/0900 GMT) EZ Unemployment Rate(Jun)

Key Events Ahead

  • No Significant Events Scheduled

FX Beat

DXY: The dollar index rebounded from an over 2-year low as high-ranking Trump administration officials met privately with lawmakers from both parties to see if they can bridge differences over the enhanced unemployment benefit. The greenback against a basket of currencies traded 0.3 percent up at 93.58, having touched a low of 93.18 on Wednesday, its lowest since May 2018.

EUR/USD: The euro declined after rising to a near 2-year high above the 1.1800 handle in the prior session, as the greenback surged across the board. The European currency traded 0.3 percent lower at 1.1761, having touched a high of 1.1806 on Wednesday, its highest since September 2018. Investors’ attention will remain on a series of data from Eurozone economies, EZ economuc sentiment indicator, unemployment data and German consumer price index, ahead of the U.S. Q2 preliminary gross domestic product price index, unemployment benefit claims, and personal consumption expenditures. Immediate resistance is located at 1.1826, a break above targets 1.1855. On the downside, support is seen at 1.1701 (5-DMA), a break below could drag it below 1.1658.

USD/JPY: The dollar rose, retreating from a near 5-month low and halting a 5-day losing streak as Federal Reserve policymakers repeated a pledge to use their full range of tools to support the economy and keep interest rates near zero for as long as it takes to recover from the epidemic. The major was trading 0.3 percent up at 105.21, having hit a low of 104.77 the day before, its lowest since March 13. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Q2 preliminary gross domestic product price index, unemployment benefit claims, and personal consumption expenditures. Immediate resistance is located at 105.66 (5-DMA), a break above targets 105.96. On the downside, support is seen at 104.43, a break below could take it near at 104.09.

GBP/USD: Sterling eased from a near 4-1/2 month peak amid concerns about the impact of the coronavirus pandemic and the lack of progress of Brexit negotiations. The European Union stated that a deal needs to be done by October to allow time for ratification by the end of the year. The major traded 0.4 percent down at 1.2951, having hit a high of 1.3013 on Wednesday, it’s highest since March 100. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3023, a break above could take it near 1.3063. On the downside, support is seen at 1.2901, a break below targets 1.2868 (5-DMA). Against the euro, the pound was trading 0.05 percent down at 90.75 pence, having hit a high of 90.35 on Wednesday, it’s highest since July 21.

AUD/USD: The Australian dollar slumped from an over 1-year high after data showed that the country’s building permits unexpectedly fell 4.9 percent on a monthly basis in June, defying market forecast for a rise of 1.5 percent and compared to a drop of 16.4 percent in the prior month. The Aussie trades 0.6 percent lower at 0.7141, having hit a high of 0.7197 on Wednesday, it’s highest since April 18. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7245, a break above could take it near 0.7273. On the downside, support is seen at 0.7112, a break below targets 0.7093 (10-DMA).

Equities Recap

Asian shares surged, boosted by the promise of ultra-easy monetary policy globally as the U.S. Federal Reserve left interest rates near zero.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2 percent.

Tokyo’s Nikkei declined 0.2 percent to 22,339.23 points, Australia’s S&P/ASX 200 index rose 0.7 percent to 6,051.10 points. South Korea’s KOSPI surged 0.2 percent to 2,267.01 points.

Shanghai composite index fell 0.2 percent to 3,287.13 points, while CSI 300 index traded 0.4 percent down at 4,659.13 points.

Hong Kong’s Hang Seng traded 0.2 percent lower at 24,833.18 points. Taiwan shares added 1.5 percent to 12,722.92 points.

Commodities Recap

Crude oil prices declined amid concerns that surging coronavirus infections could dent a recovery in fuel demand. International benchmark Brent crude was trading 0.2 percent down at $43.66 per barrel by 0543 GMT, having hit a low of $42.37 on Monday, its lowest since July 20. U.S. West Texas Intermediate was trading 0.3 percent lower at $41.19 a barrel, after falling as low as $40.51 on Monday, its lowest since July 20.

Gold prices eased from record peak as the U.S. Federal Reserve’s vow to support the coronavirus-ravaged economy boosted risk sentiment. Spot gold was trading 0.6 percent down at $1,959.14 per ounce by 0552 GMT, having hit an all time high of $1,981.35 on Tuesday. U.S. gold futures fell 0.1 percent to $1,951.05.

Treasuries Recap

The U.S. Treasury yields edged lower, with the benchmark 10-year note yield trading at 0.564 percent.


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