Outlook For Dollar, Equities And Oil Remain Sluggish For The Day

Outlook For Dollar, Equities And Oil Remain Sluggish For The Day

U.S. Dollar (CURRENCY:USD) pulled away from its two-month high against a basket of global currencies while retreating sharply against the Japanese yen. Weakness in the greenback came after it fell below technical support levels, forcing traders to shift to perceived safer Yen.

Dollar loses ground

In Asian trade, USD/JPY (USDJPY) fell 0.52% to 110.11. The yen also gained momentum after Japan’s Prime Minister Shinzo Abe said that the sales tax hike will be deferred by two and a half years. Amongst other global currencies, demand for the British pound appeared fazed after two separate polls indicated growing support for Brexit. GBP/USD (GBPUSD) oscillated between minor gains and losses at levels near 1.4482. EUR/USD (EURUSD) gained 0.17% to 1.1148 as previous day’s U.S. economic data prompted traders to trim expectations of an early rate hike.

Equities and oil plummet

China’s mixed manufacturing activity left Asian markets jittery throughout the session. A drop in U.S. consumer confidence reported yesterday, coupled with uninspiring data from China, reminded of delayed global economic turnaround. Nikkei 225 (INDEXNIKKEI:NI225) slipped 1.62% to 16,955.73 and Hang Seng (INDEXHANGSENG:HSI) plunged 0.30% to 20,752.

European equities too were unimpressed with the series of data released both in U.S. and China. Moreover, growing Brexit support weighed on overall sentiment. Both Euronext 100 (INDEXEURO:N100) and CAC 40 (INDEXEURO:PX1) opened lower by 0.40% and 0.45% to 880.59 and 4,485.45 respectively.

Oil plummeted for the second day in a row as the Middle Eastern countries are expected to pump out more oil in coming days. Besides this, weaker Chinese economy has also diminished any substantial improvement in demand. Brent Crude erased 0.96% of gains to $49.41 and West Texas Intermediate Crude oil fell 0.94% to $48.64. Moreover, analysts continue to believe that the upcoming OPEC’s meeting will largely focus on defending its market share rather than production cut.