Europe Roundup: Sterling loses steam as traders turn to safe-haven currencies, European shares dips, Gold steadies, Oil slips as global demand concerns weigh, OPEC+ meeting eyed-August 2nd,2022
•UK Jul Nationwide HPI (MoM) 0.1%, 0.3% forecast, 0.3% previous
•UK Jul Nationwide HPI (YoY) 11.0%, 11.5% forecast, 10.7% previous
•Swiss SECO Consumer Climate (Q3)-28 , -18 previous
•Spanish Unemployment Change 3.2K, -40.3K forecast, -42.4K previous
Looking Ahead – Economic Data (GMT)
•12:55 US Redbook (YoY) 13.3% previous
•13:30 Canaada Jul Manufacturing PMI 54.6 previous
•14:00 US Jun JOLTs Job Openings 11.000M forecast, 11.254M previous
• 15:00 New Zealand GlobalDairyTrade Price Index -5.0% previous
Looking Ahead – Economic events and other releases (GMT)
•No significant events
EUR/USD: The euro dipped on Tuesday as concerns about an escalation in Sino-U.S. tensions drove investors into safe-haven assets.U.S. House of Representatives Speaker Nancy Pelosi was expected to arrive in Taipei later on Tuesday, people briefed on the matter said, as several Chinese warplanes flew close to the median line dividing the Taiwan Strait. Sources said U.S. House of Representatives Speaker Nancy Pelosi was expected to arrive in Taipei later on Tuesday, which Beijing said would undermine the relationship between China and the United States as it challenges Beijing’s self-claimed sovereignty over Taiwan. Immediate resistance can be seen at 1.0266(14DMA), an upside break can trigger rise towards 1.0394(38.2%fib).On the downside, immediate support is seen at 1.0219(23.6%fib), a break below could take the pair towards 1.0186(14DMA).
GBP/USD: The British pound weakened against the dollar and euro on Tuesday as traders turned to safe-haven currencies amid rising U.S.-China tensions over Taiwan, with traders looking ahead to a Bank of England policy meeting this week. The pound was down 0.5% against the dollar at $1.22055 pence, and versus the euro was down 0.23% at 83.910 pence. The BoE will announce its decision on Thursday, with investors now pricing in an 95% chance of a 50 basis point hike, a bigger increase than the previous four hikes as the central bank rushes to contain soaring inflation without exacerbating an economic slowdown. Immediate resistance can be seen at 1.2252(38.2%fib), an upside break can trigger rise towards 1.2385(50%fib).On the downside, immediate support is seen at 1.2197(5DMA),a break below could take the pair towards 1.2064(23.6%fib).
USD/CHF: The dollar strengthened against the Swiss franc on Tuesday as rising U.S-China tensions trigger risk aversion. The rise in tension comes as the Biden administration debates whether to lift some tariffs on Chinese goods that were imposed under former President Donald Trump. The tariff war that began in 2018 had slowed global growth and disrupted supply chains. Global sentiment was already dour as weak factory activity data for July from China, Europe as well as the United States on Monday had heightened recession worries. Immediate resistance can be seen at 0.9537(5DMA), an upside break can trigger rise towards 0.9586(38.2%fib).On the downside, immediate support is seen at 0.9480 (23.6%fib), a break below could take the pair towards 0.9442 (Lower BB).
USD/JPY: The dollar declined on Tuesday as rising U.S.-China tensions over Taiwan and deepening worries about a global economic slowdown boosted the appeal of safe-haven yen. Pelosi was set to visit Taiwan on Tuesday, three sources said, as the United States said it wouldn’t be intimidated by Chinese threats to never sit idly by if she made the trip to the self-ruled island claimed by Beijing. The Japanese currency was on track for a fifth consecutive session of gains on Tuesday, taking its cumulative increase to nearly 4.5% in five trading sessions. The currency was up 0.6% at 130.78 yen, just below a high of 130.40 yen, a level last seen in early June. Strong resistance can be seen at 132.65(38.2%fib), an upside break can trigger rise towards 133.30(5DMA).On the downside, immediate support is seen at 130.33 (50%fib), a break below could take the pair towards 128.33 (61.8%fib).
European shares fell on Tuesday as weak global factory data fanned economic slowdown fears, while markets were on edge as U.S. House of Representatives Speaker Nancy Pelosi was expected to visit Taiwan.
At (GMT 12:02 ),UK’s benchmark FTSE 100 was last trading up at 0.05% percent, Germany’s Dax was down by 0.57 % percent, France’s CAC was down by 0.46 %percent.
Gold surrendered earlier gains to trade little changed on Tuesday as the U.S. dollar inched higher, although a dip in Treasury yields and growing recession fears kept bullion near four-week peak.
Spot gold was flat around $1,771.29 per ounce by 0843 GMT, after hitting its highest since July 5 at $1,780.39 earlier in the session.
Oil slipped on Tuesday as investors absorbed a bleak outlook for fuel demand with data pointing to a global manufacturing downturn just as OPEC+ producers meet this week to decide whether to increase supply.
Brent crude was down $1.40, or 1.4%, to $98.63 a barrel by 0817 GMT, while U.S. West Texas Intermediate crude fell $1.00, or 1.1%, to $92.89.