Market News

The US data of business activities and home sales are still supportive to the greenback on Monday. The Dollar Index is trading at 93 level in the European session opening despite the return of the risk appetite. Investors are questioning whether additional monetary easing is needed or not for maintaining the economic recovery. The answer may be revealed this week after Powell’s speech at Jackson Hole on Thursday.

Another key focus was the tension between China and the US. Trump’s administration declined to acknowledge claims by China’s commerce ministry that the officials of both countries will review the phase-one trade deal in the coming days.

The Dow and the S&P 500 were good in the early US trading session on Tuesday. However, the three major Wall Street indexes eventually all fell, of which the Nasdaq dropped the most, nearly 1.7%. The gold market experienced a crash-like drop, which was a significant adjustment under the risk aversion condition.

The whole financial market temporarily stabilized a bit on Thursday as it is reported that the US banking regulators are about to ease restrictions from the Volcker Rule, boosting the Wall street. Despite the fears of surging new coronavirus cases, risk appetite came back in the stock markets.

On Wednesday, the latest ADP report showed that the job cuts in the US was much less than expected, implying that the worst period may be over and the overall economy may recover earlier.

Risk appetite maintained due to the hopes of global economy reopening, further dragging down the safe-haven dollar.

The dollar rose against the offshore RMB in early trading session on Monday, once rose over 100 pips to 7.0870 level. The analysis generally believes that China's situation of the coronavirus outbreak is relatively under controlled which makes the RMB becoming stronger. However, the global situation is not that good and will still affect the Chinese economy severely.

In the European session, the dollar rebounded, with the Aussie retraced back to 0.64 below. Oil prices fell that the WTI crude futures have broken $22 level, reflecting that the production cut agreement did not help the oil market much. The gold market remains in the high level, with spot gold trading at above $1700 while spot silver trading around $15.4. ZFX analyst Jacob Leung said that there was no big news so far, but if oil prices continue the downtrend, it will definitely hit the investment sentiment and drag the whole market.

On Thursday's European Session, oil prices further tested the resistance, which the WTI crude futures reached $26.67, the day high so far. The OPEC, Russia and other major oil-producers will meet today to discuss the production cuts agreement. As Russia has indicated that it is ready to lower the production by 1.6 million barrels per day, the market is currently expecting OPEC+ will eventually reach a consensus. 

On Wednesday, bad news hit the Euro and the Aussie, together with the return of the risk aversion, the dollar once rebounded to 100.43. During the European session, the US stock index futures were just ranging, reflecting the cautious attitude of investors.