The dollar seems to be switching into a consolidative mode after another sell-off witnessed yesterday
Wall Street stocks edged higher on Tuesday despite the stalled negotiations for further government stimulus as investors were inspired by stronger-than-expected housing data. Housing starts increased by 22.6% in July, the third straight month of increases. The S&P 500 hit an intraday record and finished at fresh all-time peaks. Technology shares climbed as well, pushing the Nasdaq to record highs while the Dow Jones Industrial Average fell 0.2%.
In Asia, equities were mixed again on Wednesday. In Japan, the Nikkei 225 advanced 0.25% after fresh data showed Japanese exports contracted 19.2% last month after a 26.2% drop previously. China’s Shanghai Composite index was 1.24% lower as US President Donald Trump said he called off last weekend’s trade talks with China, which implies that the review of the phase one deal is now postponed indefinitely.
European stocks opened marginally lower but turned mixed afterward. Investors express the resurgent concerns over the coronavirus as rising cases continue to pose a threat to a fragile economic recovery in the continent. As German virus cases continue to climb, Merkel warned against further relaxing restrictions in the country. German DAX 30 has settled just above the opening levels on Wednesday. On the data front, Eurozone July final CPI came in at +0.4%, in line with the preliminary estimate.
Meanwhile, the dollar seems to be switching into a consolidative mode after another sell-off witnessed yesterday. EURUSD climbed to fresh two-year highs around 1.1965 on Tuesday and retreated slightly today in Asia. However, the common currency refrains from a deeper retreat despite the overbought conditions, suggesting the pair could climb to fresh long-term tops in the near term. Later today, FOMC meeting minutes will come into market focus.
Elsewhere, bitcoin price extends its bearish correction from 2020 highs registered marginally below the $12,500 area on Monday. As such, the leading cryptocurrency made a pause after the recent rally as investors preferred to take profit above $12,00 instead of pushing the coin above $13,000. However, the downside momentum could be limited as buyers reemerge in dips.