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Risk appetite decreases, GOLD and JPY are in vogue
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Loading...Risk appetite in the markets fell sharply yesterday after speculation that the White House's economic adviser Gary Cohen was disappointed with the actions of the president and was on the brink of resigning. Despite these speculations, the market remained confused, accumulating the uncertainties surrounding the recent events of leaving Trump's other advisers. These actions in the White House are considered to be a high probability that business is breaking the relationship with President Trump, which means that the economic program already means that it will not be fulfilled. The program, which was behind the rise in stock markets after Trump's election. Of course, other factors have been behind the negative sentiment, such as the recent events surrounding the demolition of US monuments, demonstrators' clashes, geopolitical tensions in Asia, the terrorist act in Barcelona, and others. And all that is happening in August, when the corrections are most likely. Tensions in the markets remain, with a higher likelihood of a new red session in the US.
The currency market remains also confused and cautious. Improvements in US data could not support USD that still can not find direction. Comments from the last Fed meeting on Wednesday hit the USD, which is likely to try to regain its losses next week, reflecting the ECB's concerns about inflation expectations and concerns over EUR growth. Economic data from the United States is good and may support the dollar after the negative sentiment has passed since yesterday.
JPY: Investors' caution following the political melody in the United States has led to a rise in the yen. The declines in the stock markets also support the JPY, and the question now is whether these concerns will continue or, as they have been, they will rapidly retreat. It is likely that there will be something true behind the rumors of leaving Gary Cohen, something that will come to the fore in space and lead to a new wave of sales. This is the reason to expect continued JPY support today with less force in anticipation of US news.
EUR: The protocols by the European Central Bank have shown concern over the EUR/USD rally, which has given new moods for the moment. It is these protocols that are able to stop the growth of the euro and see consolidation pending more news about the ECB's future action.
GBP: Remains weak, despite the weak dollar, which raises the probability of lower levels than 1.2840 at GBP/USD, of course after a slight correction. Expectations that BOE will not act after weaker data from the island are putting pressure on GBP. This is likely to continue despite our expectations for correction to levels around 1.2940.
GOLD: Gold remains supported by a weaker dollar and worries in stock markets. The likelihood to keep its upward direction is big. It is very likely that we will see a test at about 1300 USD
Stefan D. Angelov - Head of Stocks Trading
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