Asia roundup: Dollar rallies against Yen on easing of coronavirus lockdowns, Asian shares rally, investors eye U.S. consumer confidence data – Tuesday, May 26th, 2020

Market Roundup

  • Gold gains on Sino-U.S. tensions over Hong Kong
     
  • Oil prices rise on supply cut hopes
     

Economic Data Ahead

  • No Major Economic Releases

Key Events Ahead

  • No Significant Events Scheduled

FX Beat

DXY: The dollar index declined, halting a 3-day rally, amid easing coronavirus-induced lockdown restrictions, while investors awaited the U.S. consumer confidence data due at 1400 GMT for more clues about the health of the economy. The greenback against a basket of currencies traded 0.3 percent up at 99.56, having touched a low of 99.00 on Wednesday, its lowest since May 4.

EUR/USD: The euro surged as the market overlooked a paper from Austria, Sweden, Denmark and the Netherlands opposing the EU’s planned grants-based recovery fund and awaited the European Commission’s own release later this week. The European currency traded 0.3 percent up at 1.0925, having touched a high of 1.1008 on Thursday, its highest since May 1. Investors’ attention will remain on a series of data from Eurozone economies ahead of the U.S. new home sales, consumer confidence, housing price index, Chicago Fed National Activity Index and Fed officials speech. Immediate resistance is located at 1.0948, a break above targets 1.0976. On the downside, support is seen at 1.0871 (21-DMA), a break below could drag it below 1.0855.

USD/JPY: The dollar rose, extending previous session gains, as growing optimism about a global recovery from the COVID-19 pandemic supported investor risk sentiment. However, the upside appears limited as the handling of the pandemic and China’s move to impose laws on Hong Kong further deteriorated the U.S.-China relations. The major was trading 0.2 percent up at 107.88, having hit a high of 108.08 last week, its highest since Apr. 13. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. new home sales, consumer confidence, housing price index, Chicago Fed National Activity Index and Fed officials speech. Immediate resistance is located at 108.10, a break above targets 108.47. On the downside, support is seen at 107.38 (10-DMA), a break below could take it near at 107.06 (21-DMA).

GBP/USD: Sterling rallied above the 1.2200 handle after Prime Minister Boris Johnson stated that Britain will reopen thousands of high street shops, department stores and shopping centres next month, setting out a timetable for businesses as part of moves to ease the coronavirus lockdown. The major traded 0.5 percent up at 1.2239, having hit a low of 1.2075 last week, it’s lowest since Mar. 26. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2296, a break above could take it near 1.2343. On the downside, support is seen at 1.2130, a break below targets 1.2099. Against the euro, the pound was trading 0.2 percent up at 89.23 pence, having hit a low of 90.00 on Thursday, it’s lowest since March 27.

AUD/USD: The Australian dollar gained after China’s central bank Governor Yi Gang flagged further easing in an interview published by the People’s Bank of China. The Aussie trades 0.6 percent up at 0.6580, having hit a high of 0.6616 on Wednesday, it’s highest since March 9.  Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6620, a break above could take it near 0.6664. On the downside, support is seen at 0.6509 (10-DMA), a break below targets 0.6490 (21-DMA).

Equities Recap

Asian shares advanced as investors looked past Sino-U.S. trade tensions to more stimulus in China and a re-opening world economy.

MSCI’s broadest index of Asia-Pacific shares outside Japan rallied 1.6 percent.

Tokyo’s Nikkei surged 2.6 percent to 21,271.17 points, Australia’s S&P/ASX 200 index rallied 2.9 percent to 5,780.00 points. South Korea’s KOSPI gained 1.7 percent to 2,029.21 points.

Shanghai composite index rose 0.9 percent to 2,845.69 points, while CSI 300 index traded 1.1 percent up at 3,872.62 points.

Hong Kong’s Hang Seng traded 2.2 percent higher at 23,457.37 points. Taiwan shares shed 1.2 percent to 10,997.21 points.

Commodities Recap

Crude oil prices rose on signs that producers are sticking to commitments to cut crude supply and as the number of U.S. and Canadian rigs dropped to record lows for the third week running. International benchmark Brent crude was trading 1.9 percent higher at $36.18 per barrel by 0551 GMT, having hit a high of $36.96 on Thursday, its highest since March 11. U.S. West Texas Intermediate was trading 1.6 percent up at $34.36 a barrel, after rising as high as $34.64 on Thursday, its highest since March 11.

Gold prices surged as growing U.S.-China tensions over Hong Kong lifted demand for the safe-haven metal, although easing coronavirus-induced lockdown restrictions limited gains. Spot gold rose 0.2 percent to $1,733.33 per ounce by 0554 GMT, having touched a low of $1,717.56 on Thursday, its lowest since May 14. U.S. gold futures were down 0.1 percent to $1,733.50.

Treasuries Recap

The yields on U.S. 10-year notes were trading at 0.67 percent having recovered from a blip up to 0.68 percent last week.

Source: FXWire Media Round Ups

26. May 2020 09:05:40