Oil, Dollar And Equities Drop: Market Update
AvaTrade | Jun 06, 2017 08:40AM ET
Asian markets fell as Wall Street and oil fell overnight. The pound is inching higher ahead of Thursday’s general election.h3 Forex/h3 h3 /h3 h3 GBP/h3
Sterling was up 0.1% against the dollar at $1.29 as investors bet on the outcome of Thursday’s general election. Conservatives are still in the lead with 43.4% of the vote. In second place is labour, with 36.5% of the vote.
GBPUSD looks to be gaining some momentum in the short run as investors price in a conservative win.
h3With a flurry of economic data due to be released later today, the euro is trading in a range so far, this week.
The euro has a target of $1.13 against the dollar. The pair is supported by an upward moving average allowing for a possible bullish sentiment.
h3 /h3 h3 USD/h3As investors worry about the strength of the US economy, the dollar has fallen to a seven-month low.
The ability of Donald Trump to deliver on his pro-business agendas have been brought into question. Moreover, expectations are rife that the Fed will only raise rates two more times this year.
h3 /h3 h3 EURUSD/h3 h3The Aussie dollar added to its gains after six Arab countries cut ties with Qatar after accusing the nation of supporting terrorism.
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Qatar is a major natural gas exporter. If Qatar’s output is disrupted, this is good news for competitor Australia, who is quickly becoming a major exporter of natural gas.
h3 /h3 h3 AUDUSD/h3Crude oil fell significantly thanks to the rift between six Arab nations and Qatar.
Crude now has a support of $47.00 and a resistance of $47.50 If the price falls below the support line we could experience more bearish tones. Alternatively, if the commodity manages to inch above the resistance level the price could stabilise. OPEC’s inability to stir up demand makes me on the bearish side.
h3Gold hit a six-week high at $1288
The geopolitical risk in Qatar, rising tensions in anticipation of Federal Bureau of Investigation Chief James Comey’s testimony and the UK’s upcoming election have all stimulated demand for this safe-haven asset.
Additionally, investors fear the Fed may not raise interest rates as aggressively as previously thought.
h3Stocks are lower as investors weigh in the weaker dollar and the Fed’s probable dovish outlook.
Investors fear that Trump may not deliver on his pro-business agendas, leaving the US economy without some much-needed fiscal stimulus.
The S&P 500 dropped 0.1% after reaching a record high on Friday.
h3 European Equities/h3Taking its ques from the US, European equities have declined.
The European Central Bank will release its interest rate decision on Thursday. The central bank will likely leave interest rates unchanged.
h3 Cryptocurrencies/h3 h3 /h3 h3 Bitcoin/h3Bitcoin has once again rallied, reaching a high of $2745.99.
Bitcoin recently resolved a block size and scalability issue. Additionally, the frenzy around cryptocurrencies continues which has supported he asset’s recent rally.
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