Asian stocks rise slightly, USD decline

Asian stocks on the rise

Wall Street had a mixed session overnight, with the street falling into their bliss and buying tech and selling everything else, though the session was quiet. The S&P 500 edged down 0.08%, while the Nasdaq rose 0.49% and the Dow Jones fell 0.37%. Obviously, Wall Street isn’t too concerned about the G-7 tax deal and big American tech.

In Asia, Nasdaq and S&P 500 futures rose again, giving Asia the green light to start its day on a positive note. The Nikkei 225 rose by 0.35%, the Kospi by 0.10%. China’s Shanghai Composite is up 0.40%, CSI 300 is stable, and Hong Kong is 0.50% higher.

Regionally, Singapore is down 0.15%, while Kuala Lumpur is up 0.50%, Taipei is down 0.35% and Jakarta is up 0.10%. The Australian All Ordinaries rose 0.45%, while the ASX 200 was only 0.05% higher.

Unless there is a general surprise, Asia appears to be content to follow Wall Street on hold before inflation data later this week.

The US dollar is collapsing

The US dollar fell overnight during an indescribable session, suggesting the decline remains the path of least resistance for the greenback at this time. The dollar index lost 0.18% to 89.98 overnight, advancing a few points to 90.00 in Asia today, in what appears to be a dying session. The index remains in a wide range of 89.50 to 90.50, with a breakout indicating the next directional move of the US dollar.

EUR / USD and GBP / USD both rose 20 points to 1.2185 and 1.4168, respectively. Ultimately, EUR / USD has rebounded into a wider range of 1.2100 to 1.2250 over the past fortnight, while GBP / USD has clear support and resistance at 1.4100 and 1.4250 . Overall, only the failures of 1.2000 and 1.4000 respectively undermine the long-term bullish outlook for both currencies.

Asian currencies are stuck in neutral after the PBOC managed to put a floor below the yuan’s appreciation last week. USD / CNY at 6.3920 today with the PBOC setting neutral today. Until the PBOC signals the comfort of a greater appreciation of the yuan, the larger Asian group is likely to stall around these levels.

This article is for general informational purposes only. It is not an investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not for everyone. You could lose all of your deposited funds.

With over 30 years of forex experience – from spot / margin and NDF trading to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia-Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat International Bank, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times. and The Wall. Street Journal, among others. He was born in New Zealand and holds an MBA from Cass Business School.

Jeffrey Halley
Jeffrey Halley

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