Posted at 28 September 2020 / Categories Market Roundups
Economic Data Ahead
Key Events Ahead
DXY: The dollar index nudged lower, after rising to a 2-month peak in the prior session on data showing new orders for key U.S.-made capital goods increased more than expected in August and shipments rose to their highest level in nearly six years, suggesting a rebound in business spending on equipment. The greenback against a basket of currencies traded 0.1 percent down at 94.51, having touched a high of 94.74 on Friday, its highest since July 24.
EUR/USD: The euro steadied after tumbling to a 2-month low in the prior session as the greenback eased amid growing political uncertainty ahead of the first presidential election debate between U.S. President Donald Trump and his Democratic rival Joe Biden this week. Investors seem to have ignored ECB policymaker Ignazio Visco's comments, citing that a recent strength in the euro’s exchange rate is a worry and will warrant a reaction from the European Central Bank if it drags inflation farther away from its target. The European currency traded 0.05 percent up at 1.1633, having touched a low of 1.1612 on Friday, its lowest since July 24. Investors’ attention will remain on ECB's President Lagarde speech, amid a lack of significant economic data from the U.S. docket. Immediate resistance is located at 1.1686 (5-DMA), a break above targets 1.1719. On the downside, support is seen at 1.1595, a break below could drag it below 1.1569.
USD/JPY: The dollar declined, halting a 6-day rally, as investor focus on the first debate between U.S. President Donald Trump and rival Joe Biden on Tuesday ahead of the November election. Moreover, a spike in new coronavirus cases undermined global economic recovery hopes. COVID-19 cases are edging closer to 33 million around the globe with 992,470 reportedly dead. The major was trading 0.2 percent down at 105.31, having hit a high of 105.70 on Friday, its highest since September 15. Investors’ will continue to track the broad-based market sentiment, amid a lack of significant economic data from the U.S. docket. Immediate resistance is located at 105.71, a break above targets 105.97. On the downside, support is seen at 105.08, a break below could take it near at 104.92.
GBP/USD: Sterling rose, extending gains for the third straight session, as investors hoped Britain’s new scaled-back job support scheme will be followed by other fiscal measures. Finance Minister Rishi Sunak announced a new scheme to support jobs as COVID-19 cases surged again, but warned that the government will support only viable employment. The major traded 0.3 percent up at 1.2775, having hit a low of 1.2675 on Wednesday, it’s lowest since July 23. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2833 (5-DMA), a break above could take it near 1.2888. On the downside, support is seen at 1.2710, a break below targets 1.2673. Against the euro, the pound was trading 0.2 percent up at 91.06 pence, having hit a high of 90.91 earlier, it’s highest since September 17.
AUD/USD: The Australian dollar rebounded from an over 2-month low after a major Australian bank pushed back its RBA rate cut call from the October 6 meeting to November. Westpac economist Bill Evans expects the Reserve Bank of Australia to cut the cash rate by 15 basis points to 0.1 percent and commit to buying bonds in the 5-10 year maturities at its Nov. 3 board meeting. The Aussie trades 0.4 percent up at 0.7051, having hit a low of 0.7005 on Friday, it’s lowest since July 20. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7085 (23.6% retracement of 0.7345 and 0.7005), a break above could take it near 0.7135 (38.2% retracement). On the downside, support is seen at 0.6980, a break below targets 0.6949.
NZD/USD: The New Zealand dollar held firm above the 6.500 handle, supported by the upbeat second-tier employment data. New Zealand’s Total Filled Jobs grew 9,147 to 2.2 million in August. However, resurgence of COVID-19 cases in Europe dented investor risk sentiment. The Kiwi traded 0.1 percent higher at 0.6548, having touched a low of 0.6511 on Thursday, its lowest level since August 20. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6580 (23.6% retracement of 0.6797 and 0.6511), a break above could take it near 0.6621 (38.2% retracement). On the downside, support is seen at 0.6509, a break below could drag it below 0.6488.
Asian shares surged, boosted by a rally in Chinese shares as data over the weekend showed profits at China’s industrial firms grew for the fourth straight month in August.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent.
Tokyo's Nikkei rose 0.9 percent to 23,434.44 points, Australia's S&P/ASX 200 index eased 0.05 percent to 5,964.40 points. South Korea's KOSPI rallied 1.4 percent to 2,310.72 points.
Shanghai composite index fell 0.05 percent to 3,219.12 points, while CSI 300 index traded 0.3 percent up at 4,584.58 points.
Hong Kong’s Hang Seng traded 0.9 percent higher at 23,437.51 points. Taiwan shares added 1.9 percent to 12,462.76 points.
Crude oil prices declined as rising coronavirus cases upset hopes for a smooth recovery in fuel demand. International benchmark Brent crude was trading 0.5 percent down at $41.64 per barrel by 0457 GMT, having hit a high of $43.77 earlier in the month, its highest since September 4. U.S. West Texas Intermediate was trading 0.4 percent lower at $39.35 a barrel, after rising as high as $41.46 earlier in the month, its highest since September 4.
Gold prices steadied as the dollar rally took a pause, while traders were on sidelines as political uncertainty built ahead of the first presidential election debate between U.S. President Donald Trump and his Democratic rival Joe Biden this week. Spot gold was trading flat at $1,861.38 per ounce by 0502 GMT, having hit a low of $1848.84 on Thursday, its lowest since July 22. U.S. gold futures were down 0.1 percent at $1,864.50.
The U.S. Treasury yields eased, with the benchmark 10-year note yield trading at 0.661 percent and the 30-year yield at 1.405 percent.