Us stocks ended higher on Wednesday as investors digested the message from the Federal Reserve that reiterated its promise to provide support until the threat of the coronavirus to the U.S. economy has passed. The central bank left benchmark interest rates unchanged near zero, as expected. Meanwhile, the CEOs of big tech companies emerged from a House antitrust hearing relatively unscathed. As a result, the Dow Jones Industrial Average ended 0.6% higher, the S&P 500 added 1.2%, and the Nasdaq Composite climbed 1.4%.
Today in Asia, stocks were mixed on Thursday. Japan’s Nikkei 225 dipped 0.25% despite Japan reporting retail sales rose by a better-than-forecast 13.1% in June. South Korea’s Kospi rose 0.17% while Australia’s S&P/ASX 200 picked up 1%. Hong Kong’s Hang Seng index declined nearly 0.7% while China’s Shanghai Composite ended 0.235 lower. In individual stocks, Samsung Electronics received a strong boost in second-quarter profit due to strong demand for chips.
European markets opened in the negative territory today amid lingering worries about a possible second wave of the coronavirus pandemic. The Stoxx Europe 600 dropped 1.32%. The German DAX plunged 2.5% and the FTSE 100 dropped 1.7%. On the data front, Germany reported its worst decline in GDP since 1970 despite the contraction was less than expected. Eurozone July final consumer confidence came in at -15.0 versus the preliminary estimate of -15.0. Eurozone June unemployment rate arrived at 7.8% versus 7.7% expected.
Meanwhile, the greenback shifted into a corrective mode after another sell-off witnessed after the announcement of the Fed’s meeting outcome. EURUSD rally stalled around 1.18 yesterday. Now, the pair threatens the 1.1730 intermediate support, a break below which could open the way to 1.17. of note, weak economic data out of Germany and the Eurozone failed to put the common currency under the additional selling pressure. Despite the current recovery in dollar demand amid the intensifying risk aversion, the downside potential for the EURUSD pair remains limited.
