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Old 04-06-2019, 06:57
MikhailLF MikhailLF is offline
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Join Date: Sep 2017
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Default Re: Forex News Analysis by LiteForex

Morning Market Review
2019-06-04 08:49 (GMT+2)


EUR grew significantly against USD on Monday updating a new local high of May 13. Macroeconomic statistics on business activity in the US, which turned out to be worse than forecasts, contributed to the development of "bullish" dynamics on the instrument at the beginning of the week. ISM Manufacturing PMI in May declined from 52.8 to 52.1 points with the forecast of 53.0 points. Markit Manufacturing PMI in May declined from 52.6 to 50.5 points. In turn, ISM Manufacturing Prices in May rose from 50.0 to 53.2 points, which turned out to be better than the average market expectations of 52.0 points. European statistics on business activity was contradictory, but came close to forecasts, so it did not have a noticeable effect on the dynamics of the instrument. Euro area's Manufacturing PMI went down from 47.9 to 47.7 points in May.


GBP continued to rise against USD during the Asian session on June 3, rising to local highs of May 28. The pound was under pressure from weak data on business activity from the UK at the beginning of the week. According to the data from Markit, Manufacturing PMI in May fell from 53.1 to 49.4 points, while investors expected a decline only to 52.0 points. Investors are focused on the state visit of US President Donald Trump to the UK in addition to a marked increase in trade tensions in the market. Trump intends to discuss issues regarding the Chinese company Huawei, against which the United States recently imposed sanctions. It is planned that the Chinese corporation will be involved in the construction of fifth-generation communication networks in the UK. In addition, on the agenda of the visit are questions about a free trade agreement between countries, which is planned to be concluded after Brexit, in order to level losses from the process.


AUD rose against USD on Monday, noting local highs of May 13. The Australian currency was supported by quite positive data on China's business activity, which did not demonstrate the expected decline. The growth of the instrument was also supported by the uncertain statistics on business activity from the US, which heightened tensions around the possible onset of a recession in the US economy. During the Asian session, the pair shows ambiguous trading. AUD is under pressure from the RBA decision to lower the interest rate to 1.25%.


USD continues to weaken against JPY against the background of a further decline in investor interest in risk. The focus of the market is on US trade conflicts that threaten with a slowdown in global economic growth. Earlier, Donald Trump put forward a new ultimatum to Mexico. The US will increase import duties on all Mexican goods from June 10, unless the Mexican government takes measures to reduce the flow of migrants across the southern borders of the United States. Monday's macroeconomic statistics from Japan provided little support to the yen. Nikkei Manufacturing PMI grew from 49.6 to 49.8 points which was better than expected (49.6 points). Capital Spending in Q1 2019 grew from 5.7% to 6.1% with the forecast of +11.6%.


Oil prices continue to show negative dynamics. The main downward factor for the instrument remains the decline in global demand for raw materials amid worsening trade conflicts. Donald Trumpís statements about the intention to introduce import duties on Mexican goods from June 10, which were likely to have a negative impact on Mexican oil imports, hit the quotes hard. The former threats of weakening demand against the background of the US-Chinese trade war still remain. Protracted negotiations between the parties have not yet led to consensus, and Washington has only aggravated the situation, imposing tough sanctions against the Chinese Huawei. In turn, quotes are supported by positive statements by Saudi Arabia that the OPEC+ deal will continue to be implemented by all members of the cartel.
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