After extending losses against the U.S. Dollar (CURRENCY:USD), the Euro managed to regain strength pre market US. The Euro’s early day losses came after benchmark German government 10-year bond yields slipped into negative territory over concerns around looming Brexit vote.
Asia and Europe gains
Forex analyst, Junichi Ishikawa at IG Securities, said that pressure on the euro is primarily linked to negative German bond yields. He added that the European Union could turn dysfunctional in an event that Britain parts with it.
During late Asian trade, EUR/USD (EURUSD) added 0.08% to 1.1216 and GBP/USD (GBPUSD) advanced 0.46% to 1.4177. Ahead of the outcome of the Federal Reserve meeting, the USD/JPY (USDJPY) moved up by 0.18% to 106.29.
Chinese equities provided much-needed support to indices across Asia while overlooking the MSCI’s decision to not include Chinese A shares in its key emerging market index. Shanghai SE Composite Index inched up 1.58% to 2,887.21. Steep losses recorded by Japanese equities in the recent past gave room for investors to turn into buyers. The Nikkei 225 (INDEXNIKKEI:NI225) closed 0.38% higher at 15,919.58 today.
European markets also turned positive after four days of steady decline, however, the British referendum due next week will continue to keep investors cautious. CAC 40 ((INDEXEURO:PX1) and Euronext 100 (INDEXEURO:N100) opened 0.96% and 0.87% higher at 4,170.15 and 825.94 respectively.
Oil slips over supply worries
iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) weakened for another consecutive day as a surprise increase in U.S. crude stockpiles outweighed International Energy Agency’s positive outlook over commodity. Moreover, Brexit fears left investors anxious despite strong fundamentals favoring oil demand. Brent Crude erased 0.80% gains to $49.43 and West Texas Intermediate Crude oil fell 0.68% to $48.16. Data published by the American Petroleum Institute (API) showed that U.S. crude stocks surged 1.2 million barrels to 536.7 million during the previous week ended on June 10. This data disappointed analysts’ estimates, which projected a fall of 2.3 million barrels.