EURUSD was rejected from the 1.20 handle yesterday and extended losses to 1.1860 during the European hours
US stock markets finished higher on Tuesday after manufacturing data showed the country’s economy continued to recover from the coronavirus crisis. ISM’s manufacturing PMI climbed from 54.2 in July to 56, the highest figure since January 2019, and better than the market expectation of 54.5. Also on the positive side, a White House official said that Republicans were likely to take up a COVID-19 relief bill next week. As a result, both the S&P 500 and Nasdaq closed at a record, with the technology sector and Apple leading the gains. The S&P 500 and the Dow Jones Industrial Average added 0.75% each, while the Nasdaq Composite rallied 1.39%.
Today in Asia, equities were mixed-to-positive. South Korea’s Kospi inched up 0.63% after the official report showed that August’s consumer price index rose 0.7% year-on-year. In Australia, the GDP contracted by 7% during the second quarter, confirming that the country’s economy has fallen into a technical recession. Despite weak numbers, the ASX 200 jumped 1.84% as the Australian state of Victoria reported it was looking to ease lockdown restrictions.
European equities opened higher on Wednesday as the common currency eased in a retreat from long-term highs after Philip Lane, chief economist at the European Central Bank, said the euro-dollar rate does matter. On the data front, German retail sales were down by 0.9% in July after a revised drop of 1.9% in June.
Comments from Philip Lane coupled with German data and a broader recovery in dollar demand sent the euro lower on Wednesday. EURUSD was rejected from the 1.20 handle yesterday and extended losses to 1.1860 during the European hours today. Later in the day, the US ADP employment data could affect USD-pairs, and strong numbers will likely add to recovery momentum in the greenback.
Elsewhere, bitcoin finished around the $12,000 handle yesterday but failed to preserve gains and retreated sharply on Wednesday. The digital currency has already given up nearly all gains seen on Tuesday and is nearing the $11,600 region. It looks like investors opted to take profit after a five-day winning streak.
