The global risk sentiment was supported by stronger-than-expected flash PMI reports from the Eurozone and the UK. The upbeat data revived hopes for a sharp V-shaped global economic recovery, with France a stand-out as lockdown loosening there led to a modest return to growth.
News on the coronavirus, however, are hardly encouraging with several U.S. states seeing record infections and the death toll in Latin America passing 100,000 on Tuesday, according to Reuters.
The European Union is prepared to bar U.S. travellers because of the surge of cases in the country, putting it in the same category as Brazil and Russia, the New York Times reported.
The better European data combined with the positive risk mood has kept the U.S. dollar under pressure.
The euro edged up to $1.1320, having been as low as $1.1167 on Monday, while the dollar eased to 106.59 yen after touching a six-week low of 106.06 at one stage. The British pound is holding steady against the dollar at $1.2514.
In commodity markets, the decline in the dollar and endless cheap liquidity from central banks helped lift gold to its highest since October 2012. The metal was last at $1,767 an ounce.
Oil is extending losses from the previous session after US crude stockpiles grew by more than expected, fuelling concerns over oversupply. Crude inventories rose by a larger 1.7 million barrels last week, according to the American Institute of Petroleum, significantly ahead of the 300,000-build forecast. EIA data will be keenly awaited today. Brent crude futures declined 8 cents to $42.55 a barrel, while U.S. crude fell 20 cents to $40.17.
Moving ahead, market participants now look forward to the release of the forward-looking German IFO Expectations Index for June at 08:00 GMT. Apart from this, there isn’t any major market-moving economic data due for release on Wednesday in the session ahead.
US will release some second-tier economic data in New York morning and Chicago Fed President Evans and St. Louis Fed President scheduled to speak today at 16:30GMT and 19:00GMT respectively. However, the broader market sentiment will be the key driver for today.
US Dollar Down as Markets remain optimistic – German IFO business sentiment data in focus
Published on 2020-06-24 07:32
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