Forex Today: Stocks cheer coronavirus hopes, dollar licks its wounds in the Fed aftermath
- 31st August 2020
- Posted by: Hakeem
- Category: FOREX LATEST NEWS DAILY
Here is what you need to know on Monday, August 31
Investors are cheering fresh hopes for an upcoming coronavirus vaccine and upbeat Chinese PMIs. Eurozone CPI figures and end-of-month flows are set to move markets.
Coronavirus vaccine hopes: Stephen Hahn, head of the US Food and Drug Administration, said he is willing to fast-track vaccine approval if benefits outweigh the risks. China has approved the Sinovac COVID-19 vaccine candidate for emergency use, starting with high-risk groups.
Chinese purchasing managers’ indexes for August came out above 50, pointing to expansion. The Services PMI beat estimates with 55.2 points, showing that consumers are catching up as life in the world’s second-largest economy is broadly returning back to normal.
Japanese stocks are advancing, recovering after Warren Buffet’s Berkshire Hathaway announced an investment in local firms. Moreover, the Japanese press reports that economic policy will likely remain on course after the resignation of Prime Minister Shinzo Abe. The safe-haven yen is paring its gains.
China may block the sale of TikTok to an American company, potentially adding to Sino-American tensions. The short-video application is considered a security threat by Washington and Beijing is reportedly worried about the export of artificial intelligence technologies.
Overall, Asian markets are on the rise and S&P 500 futures are pointing to new record highs. Gold is moving higher as well.
EUR/USD is trading around 1.19, holding onto gains. The surge in French coronavirus cases – joining Spain’s worrying situation – is somewhat weighing on the euro. Preliminary eurozone inflation figures for August are due out on Monday.
GBP/USD is trading above 1.33 but off the highs. The UK government is mulling £30 billion in tax hikes to plug a hole in the deficit and cause anger within the Conservative Party. Brexit talks remain deadlocked and Chief UK Negotiator David Frost said Britain is ready to walk away from talks.
Richard Clarida, Vice Chairman of the Federal Reserve, will speak later in the day. He may comment on the Fed’s shift to allow inflation to overheat, a move that sent the dollar down last week.
Oil prices are holding onto higher ground in the aftermath of hurricane Laura’s landfall. Facilities are gradually opening up in the Gulf of Mexico.
Cryptocurrencies had a positive weekend, with Bitcoin rising to above $11,600 and Eterheum topping $400. Digital coins are edging lower on Monday.