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EUR/USD Price: Why Markets Shifted to Risk-off Mode?

EUR/USD Price: Why Markets Shifted to Risk-off Mode?

Demand for Safe Haven increases, and the IMF with World bank improves their global economic forecasts, what are EUR/USD, Gold, and other market movers today?

The Japanese industrial production number for August released earlier of -13.8% came in lower than expected of -13.3% however, better than the prior read of -15.5%. However, the released data did not have any noticeable effect on the Japanese yen against major currencies.

Equities

Risk-on sentiment reversed on Tuesday on news of the delay in agreeing on the US financial aid and pausing Johnson & Johnson COVID-19 vaccine’s trials due to the unexplained illness of a participant. Additionally, the Bank of England governor said that the economic recovery faces headwinds from the second wave of the coronavirus, so he did not think that the UK economy was undergoing a V shape recovery.

The International Monetary Fund and the World Bank have slightly improved their global growth forecast and predicted that the global GDP to contract 4.4% this year, compared to the 5.2% forecasted in June thanks to lifting the lockdown majors. This step helped to accelerate the economic recovery of some countries, especially China and concluded that maintaining current stimulus majors is decisive for families and businesses until finding a solution for the coronavirus.

Stock Market

Change %

S&P 500

-0.6%

Dow Jones

-0.5%

NASDQ

+0.04%

Japan 225

-0.5%

DAX 30

-1.1%

FTSE 100

-0.7%

CAC 40

-0.6%

EUR/USD and Main Currency Pairs

The US dollar benefited further from a weaker risk-on sentiment. This week, the US Dollar index U-turned and rose by 0.5% eyeing a test of 94.04.

The EUR/USD closed on Tuesday below the 50-day average shifting the market direction towards the low end of the current trading zone 1.1909- 1.1713. Close below 1.1713 could encourage bears to press towards 1.1621.

The GBP/USD edged lower on Tuesday and closed below 1.3048 eyeing a test of 1.2773. Markets will keep an eye tomorrow on the European council meeting as the future relationship with the UK will be on the European leaders’ schedule.

Gold and Oil

The Brent oil failed to close above $42.50 twice this week reflecting the lower global demand caused by the increased number of COVID-19 cases in Europe and elsewhere. The price may keep falling towards $39.60 while the US Crude could trade towards 38.37.

The Gold failed to close above the 50-day average and lost on Tuesday 1.6% of its value due to a stronger US dollar. The precious metal could be on the way to test $1,861/oz.

Looking Ahead

The EUR/USD and Gold traders will find out about the Eurozone industrial production number of August at 10:00 AM (GMT) the US PPI figures of September at 1:30 PM and Fed members Clarida and Quarles will speak at 2:00 PM and 8:00 respectively.

Esta información/estudio preparada por Mahmoud Alkudsi no tiene en cuenta los objetivos específicos de inversión, la situación financiera o las necesidades particulares de una persona. El analista de estudios es, principalmente, responsable del contenido de este informe de estudio, en parte o en su totalidad, certifica que los puntos de vista sobre las compañías y sus valores expresados en este informe reflejan con exactitud sus puntos de vista personales, y como consecuencia, toda persona que actúe basándose en ellos lo hace bajo su propio riesgo.

El estudio proporcionado no constituye los puntos de vista de JME Financial Services (Pty) Ltd., ni es una invitación a invertir con JME Financial Services (Pty) Ltd. El analista de estudios certifica, además, que ninguna parte de su remuneración ha sido, es o será directa o indirectamente relacionada con recomendaciones o puntos de vista específicos expresados en este informe.

A partir de la fecha en la que se publique el informe, el analista de estudios y su esposo/a o familiares que dependen financieramente de dicho analista, no mantendrán intereses en los valores recomendados en este informe (“como “intereses” se incluyen la titularidad directa o indirecta de los valores).

El analista de estudios no está contratado por JME Financial Services (Pty) Ltd. Le animamos a buscar asesoramiento con un consejero financiero independiente con respecto a la idoneidad de la inversión, en virtud de otra participación separada, cuando considere oportuno que es conforme con sus objetivos específicos de inversión, su situación financiera o, sus necesidades financieras particulares antes de comprometerse a invertir..

Las leyes de la República de Sudáfrica regirán cualquier reclamación relacionada o que surja de los contenidos de la información/estudio proporcionado.