A
negative vibe continues to linger in the vicinity ahead of looming U.S. tariffs
on $200 billion worth of Chinese goods, while uncertainty over NAFTA talks have
left global sentiment extremely cautious. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
The lack of appetite for risk can be observed across stock markets today, with
a wide number of Asian shares closing in red territory and European stocks
following a similar trend.
The
popular topic among investors remains the brutal selloff across emerging market
currencies. It has certainly been a terrible trading week thus far for most
major EM currencies as investors begin to compare the ongoing pressure in EM
currencies to the 1997 Asian financial crisis. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Trade war tensions and broad-based Dollar strength continue to play an active
role in the weak sentiment for emerging markets, but the indications that
investors have used the past events in Turkey to attack markets belonging to
those with high current account deficits should not be ignored.
The
Indonesian Rupiah fell to another 20-year low against the USD earlier today
while the Indian Rupee has fallen to yet another record low. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
The South African Rand has also been blasted into weakness following news
yesterday that the economy has entered a recession. The most recent moves in
the Rand are beginning to catch up to pre-crisis moves in the Lira, with the
economic challenges that South Africa faces being quite similar to those in
Turkey.
Heavy
declines in the Turkish Lira and Argentina Peso have overall spread like a
virus to other economies in the developing world with the Indonesian Rupiah,
Rand and Russian Ruble just a few of the many succumbing to the negative
trading environment. With the financial turmoil in Turkey and Argentina eroding
sentiment and trade disputes promoting risk aversion, the near-term outlook for
EM currencies remains pointed to the downside.
In the
United Kingdom, Sterling bulls failed to make an appearance despite activity in
Britain’s service sector picking up momentum in August. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Although UK Services PMI rose 54.3 in August, up from 53.5 July, the fairly
bland reaction continues to highlight how investors may be redirecting their
attention elsewhere – namely uncertainty over Brexit talks. Taking a look at the
technical picture, the GBPUSD remains bearish on the daily charts as long as
bears can maintain control below 1.2900.
Across
the Atlantic, the US Dollar is likely to remain king of the hill in the
currency markets as trade tensions stimulate safe-haven demand for the
Greenback. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
For as long as the Dollar continues to benefit from risk aversion the outlook
remains bullish. Regarding the technical perspective, the Dollar Index is
firmly bullish on the daily charts. Prices could challenge 95.80 in the near
term once a daily close above 95.50 is achieved.
Gold
prices floated slightly higher today amid the risk-off sentiment, but gains are
seen as being capped by King Dollar. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
The yellow metal has failed on repeated occasions to find any solid support
from global trade concerns and this continues to be displayed in price action.
Technical traders will closely observe how prices behave above the $1,190
level. An intraday breakdown below this
level can open up the gates for a potential return to the 2018 low last seen
nearly a month ago.
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