Market participants also express worries about a potential government shutdown
Wall Street equities tumbled on Tuesday as investors digested fresh economic data out of the United States. In particular, new home sales and consumer confidence data missed estimates, raising concerns over the health of the US economy as the Federal Reserve continues follow its hawkish path. Also, market participants expressed worries about a potential government shutdown. During the regular trading session, the S&P 500 and the Nasdaq Composite gave up 1.47% and 1.57%, respectively. The Dow Jones fell 1.14% to see its worst day since March.
In Asia, equities reversed early losses to trade mostly higher on Wednesday as investors assessed regional economic data. For the first eight months of the year, profits at China’s industrial firms fell 11.7%, so the pace of declines eased slightly in August. In Australia, inflation climbed 5.2% year on year in August, in line with expectations. Japan’s Nikkei 225 finished less than 0.1% lower, South Korea’s Kospi climbed in the afternoon session to end 0.9% higher, while Hong Kong’s Hang Seng index rose nearly 0.5%, reversing yesterday’s losses.
The US dollar keeps refreshing multi-month highs, holding above the 106.00 figure for the first time since November. The USD index extended the recent ascent to the 106.30 zone and was last seen trading around the upper end of the range. Should this barrier give up any time soon, the 106.50 zone will come into the market focus next. The greenback continues to attract demand due to its safe-haven status as risk aversion dominates financial markets these days. So, should risk sentiment improve in the near term, the rally in the DXY may wane somehow.
In other markets, gold keeps losing ground this week, falling victim to a rallying dollar. The XAUUSD pair derailed the $1,900 psychological level for the first time in more than a month, suffering steep weekly losses after the recent sell-off. Last week, the precious metal failed to hold above the key SMAs, so the selling pressure reemerged to send the prices to fresh local lows. Should the bullion stay on the defensive in the near term, the $1,890 support zone could be threatened. On the upside, a decisive recovery above $1,900 would help somehow improve the technical picture.