August 8, 2020

Yen held at five-week low – Eyes on ECB

LQDFX Forex news Blog Yen held at five-week low – Eyes on ECB

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The Japanese yen held at a five-week low versus the greenback on Tuesday as investors cut bets on economic gloom.

Firming government bond yields encouraged investors to trim their bearish bets on the global economy. Commodity-focused currencies such as the Australian dollar and the New Zealand dollar also firmed amid the relief rally in global markets.

Investors wait for more policy easing from the European Central Bank at a review this week.

Recent data has lifted some of the gloom over the global economy. Citi’s Economic Surprise Index for the United States turned positive in the past week for the first time since February. The UK’s equivalent turned positive for the first time since June. The G10 aggregate index is on the cusp of flipping into the black and is at its highest in a year.

On the trade war side, the European Union will seek to convince U.S President Donald Trump to see “the error of his ways” and abandon some of his “reckless” trade policies. The EU executive’s incoming trade commissioner, Phil Hogan, added on Tuesday that Brussels will press on with other trade deals regardless.


Forex – Yen held at five-week low – Eyes on ECB

Investors await ECB policy meeting on Thursday.

The dollar strengthened and appetite for riskier assets improved on rising hopes of global economic stimulus.

The Canadian dollar edged higher 0.1% against its U.S. counterpart on Tuesday, approaching a near six-week high reached the previous day. Amid signs of firm domestic economic activity, the Bank of Canada last week left its benchmark interest rate unchanged.

The euro was broadly flat at $1.104. It reached an overnight high of $1.1067.

The British pound was steady. Investors kept their hands off the sterling given that the risk of no-deal Brexit on Oct. 31 remained high.Britain’s parliament voted to block Prime Minister Boris Johnson’s bid for an early election. This pushed him to promise he would secure a Brexit deal at a European Union summit next month.

Sterling was flat at $1.2345 around 1130 GMT, having jumped to a six-week high the day before. Against the euro, the pound was slightly higher at 89.40 pence.

Gold prices dip to near 1-month low as risk appetite dents safe havens. Spot gold was down 0.3% at $1,493.80 per ounce as of 1239 GMT, after hitting its lowest level since Aug. 13, earlier in the session.

Oil prices rose on Tuesday to their highest levels in almost six weeks. Optimism that OPEC and other producing countries will agree to extend output cuts to support prices weighed. Brent was up 67 cents or 1.07% at $63.26 a barrel by 1305 GMT. WTI futures were up 63 cents, or 1.09%, at $58.48 a barrel.

PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money