Coronavirus anxiety weighing on recovery hopes; flight for safety, Dollar up

USD

The dollar index which measures the greenback against a basket of major currencies rebounded from a one-month low of 96.24 to 96.92 as COVID19 resurgence drove investors towards safety. WHO warns pandemic is getting worse; Hong Kong confirms that all schools will be closed starting next week, and Melbourne’s residents are barred from leaving their homes for six weeks. Market participants are afraid that the continued rise in covid19 cases and renewed lockdowns will curb global economic recovery. The EURUSD eased to $1.1270 from $1.1370, and AUDUSD declined to $0.6930.

Equities

Major US stock-index futures today are in negative territories especially after yesterday's wild ride where the Dow Jones Industrial Average dropped more than 2%. Investors are not hopeful of a global recovery to be coming anytime soon. The Dow Jones Industrial Average futures fell to 25302, the S&P500 futures declined to 3115, and Nasdaq futures eased to 10578 after posting an all-time high of 10693.

Metals

Gold dropped more than 1% as prices were trading near their highest levels since late 2011. The renewed lockdown procedures due to surging cases also boosted the dollar, making gold more expensive for holders of other currencies. The price of a gold ounce is hovering around $1795 after hitting $1815 yesterday, the current price of silver is $18.48 after peaking $19.02, the highest since February 2020, and palladium futures unchanged at $1968.

Oil

Oil steep losses from the previous session are due to renewed lockdowns following a surge in coronavirus cases and that it would suppress fuel demand. The West Texas Intermediate crude August delivery dropped more than 2% to $38.83, and Brent Blend September delivery tumbled more than 3.5% to $41.67.

Major Economic Events

Disclaimer

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM.COM. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.