Risk sentiment remains fragile due to the growing fears of a second wave of outbreak. The rise in the number of cases in certain US states and the rise in the emergency warning in Beijing, followed by the cancellation of 60% of flights and the shutdowns of schools are worrisome. In the semi-annual monetary policy report to the Congress, Chair Powell has warned of the “significant uncertainty remains about the timing and strength of the recovery. Much of that economic uncertainty comes from uncertainty about the path of the disease and the effects of measures to contain it. Until the public is confident that the disease is contained, a full recovery is unlikely.”
Major US equity benchmarks ended on a mixed note following a late selling spree on Wall Street:
- Dow Jones Industrial Average erased 170 points or 0.7% to 26,120.
- S&P 500 lost 11 points or 0.4% to 3,113.
- Nasdaq Composite rose by 15 points or 0.2% to 9,911.
It was also a choppy trading session in the forex market. Major currencies were mixed against the US dollar. Safe-haven currencies were among the best performers while the Euro emerged as the weakest.
Crude oil prices struggled to firm higher as virus fears are growing. Weekly oil reports have also contributed to the downside momentum. The EIA reported that the US commercial crude oil inventories have increased by 1.2 million barrels from the previous week. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) are trading lower at $37.37 and $40.24, respectively.
As risk sentiment fluctuates between growing virus fears, geopolitical risks and a mixed picture on the economic data front, Gold has consolidated in a tight range in the latest trading sessions. As of writing, XAUUSD pair is currently trading at $1,728.
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