EURUSD keeps losing ground for the sixth day in a row on Monday
Wall Street stocks declined on Friday as investors were not impressed by quarterly earnings reports from the tech giants Facebook, Alphabet, and Apple, as their uncertain growth outlooks sent stocks lower. On a weekly basis, the S&P 500 slipped 5.6%, while the Dow Jones tumbled 6.5%, seeing the worst weekly declines since the peak of the pandemic in March.
Asian markets climbed on Monday buoyed by further signs of recovery in China’s manufacturing sector. The Caixin/Markit Purchasing Managers’ Index for Chinese manufacturing came in at 53.6 for October, better than 53.0 expected, with the reading being the highest since January 2011. Furthermore, China’s official manufacturing PMI for October arrived at 51.4 — the eighth consecutive month of expansion. As a result, Japan’s Nikkei 225 added 1.4%, South Korea’s Kospi gained 1.4%, Australia’s S&P/ASX 200 added 0.4%, while the Shanghai Composite finished just marginally higher.
European stocks opened mildly higher to start the day, mirroring a slightly more positive tone seen in US futures. Still, the overall market direction is going to depend on the US election tomorrow. On the positive side, the UK Financial Services Authority said to announce further support for borrowers impacted by the virus crisis. Meanwhile, Spain’s October manufacturing PMI came in at 52.5 versus 51.0 expected.
Meanwhile, the dollar remains elevated to start the week, with EURUSD keeping losing ground for the sixth day in a row on Monday. The pair dipped below the 100-DMA for the first time since late-May, which is a bearish technical signal for euro bulls. As of writing, EURUSD was changing hands at fresh lows around 1.1625 and could threaten the 1.16 handle if the pressure persists in the short term.
Elsewhere, oil prices plunged to five-month lows early on Monday, staying on the defensive early in Europe. The selling pressure has intensified as the number of coronavirus cases keeps rising, threatening the already fragile recovery in global energy demand. Besides, the US drilling activity continued to rebound last week, suggesting crude oil production in the country will keep rising in the coming weeks.