The massive gains made on Friday inspired by the Euro summit agreement fell prey to profit takers and bottom feeders in Asian trading morning as much of the Euphoria appeared to wane.
The USD, a traditional safe harbor for investors in uncertain times recovered some its losses as investors snapped up nicely priced positions and took profits on the gains made on Friday. As the USD strengthened, its traditional hedges in the commodity markets fell.
Oil, which rose by nearly 10% on Friday was down 1.37%, trading at 83.81 a barrel, whilst Gold was down 0.67% and Silver falling 1.14% at time of writing, having enjoyed big gains at the end of last week. In the currency markets the EUR/USD was down 0.29%, trading at 1.2625 whilst the greenback enjoyed a 0.30% gain against the Swiss Franc, as the USD experienced increases against most major currencies.
Positive data from China and Japan helped boost Asian stocks with Australia’s S&P/ASX200 rising 1.20%, and Japan’s Nikkei 225 Index increasing 0.30%. In Hong Kong, markets are closed due to it being a national holiday there. In Japan, the Tankan Manufacturing index survey released this morning showed that business sentiment was improving with increasing to a seasonally adjusted -1 in the second quarter from -4 in the preceding quarter. Analysts had been expecting the index to remain unchanged at -4.
Over in China it was reported that its manufacturing activity grew at its slowest pace in seven months in June, but still was better than forecast. China’s official purchasing managers index (PMI) fell to 50.2 from 50.4 in May, but still beat the 49.9 estimated reading by analysts.
Today the focus will be on the Eurozone with the release of key unemployment rate figures with an increase of 11.1% expected, up from 11%. This would make it the highest on record since 1990 and would heap pressure on the EUR – already down 0.27% against the USD in Asian trading. In what promises to be a volatile day for binary traders with plenty of profit opportunities, the USD will be in focus later today too as the Institute for Supply Management in the US will release its Manufacturing Purchasing Managers Index.
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