By Deepta Bolaky
Following the impressive rally in the stock market over the last few weeks, investors appear to be taking a pause and booked profits ahead of the Fed’s decision. Major European bourses retreated by 1.5% to 2% on Tuesday while the downside momentum was slightly less-aggressive in the US markets.
World Equity Indices
In the FX space, major currencies were mixed against the US dollar. Investors have pulled back from riskier assets which fueled demand for safe-haven currencies.
Source: Bloomberg Terminal
Risk-sensitive currencies like the New Zealand and Australian dollar retreated from high levels seen recently. The Antipodeans were among the worst-performing currencies against the greenback on Tuesday.
Caution will likely prevail as the focus shifts to the Fed.
Ahead of the API report, the attention was on the shutdown of Libya’s largest oil field, just one day after reports that the oil field has resumed production. After months of ongoing civil unrest, Libya’s NOC declared force majeure on exports from its Sharara oil field.
The API reported a build of 8.42 million barrels over the last week which means that demand for oil remains soft, adding downward pressure on crude oil prices. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) are trading at $38.40 and $41.18, respectively.
Amid the reopening of economies, geopolitical risks and a weaker US dollar, the precious metal has been trading sideways within a $70 range as traders await for the next biggest catalyst. As of writing, gold has firmed higher above the $1,700. Gold traders will eye the outcome of the Fed’s two-day policy meeting.
XAUUSD (Daily Chart)
Source: GO MT4
By Deepta Bolaky
|Thursday, 11 June 2020
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