Asian stocks traded mixed on Monday as investors continued to express some concerns over the rising coronavirus cases globally and rising US-China geopolitical tensions amid tit-for-tat consulate closures in both countries. Besides, hopes of a quick U.S. economic recovery are fading these days, adding to a cautious tone among global investors. On the positive side, Taiwan’s TSMC stocks rose almost 10%, to finish at a fresh record high on Monday after rival Intel signaled it might give up manufacturing its own components due to delays in new 7 nanometer chip technology.
In Europe, stocks opened mixed-to-lower as investors continue to watch rising diplomatic tensions between the U.S. and China while the U.K. imposed quarantine measures on people returning from Spain. Meanwhile, a White House official said that Trump administration officials and Senate Republicans had reached an agreement in principle on a fresh coronavirus relief bill. If successful, fresh stimulus measures could support positive risk sentiment in the short term.
Elsewhere, the greenback remains under heavy selling pressure on Monday after significant losses seen last week amid US-China tensions and a strong rally in gold prices. The euro extended gains to fresh late-September 2018 highs above 1.17 and retains its bullish tone during the European hours on Monday.
Also on the positive side for the common currency, Germany July Ifo business climate index came in at 90.5 versus 89.3 expected, feeding into more optimism of a rebound in the third quarter. Ifo economist also highlighted that optimism was gradually returning. A daily close above the 1.17 handle could open the way to fresh long-term highs for the EURUSD pair in the days to come.
Meanwhile, gold prices continue to rally, refreshing all-time highs around $1,945 as risk-off tone persists due to several risk factors globally. Despite the overbought conditions, the bullish potential in gold prices persists while the potential pullbacks will likely be shallow and modest at least as long as global investors keep a cautious tone.