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Asia Roundup: Kiwi rallies as RBNZ unveils new lending scheme, dollar eases against yen amid concerns over rising virus cases, Asian shares surge as vaccine hopes offset second-wave worries- Wednesday, November 11th, 2020

Posted at 11 November 2020 / Categories Market Roundups


Market Roundup

  • Oil gains after stockpile draw
     
  • Gold firms on softer dollar
     

Economic Data Ahead

  • No Major Economic Data Releases

Key Events Ahead

  • (0800 ET/1300 GMT) ECB's President Lagarde speech     
     
  • (0830 ET/1330 GMT) ECB's De Guindos speech  
     
  • (0945 ET/1445 GMT) ECB's De Guindos speech  
     
  • (1100 ET/1600 GMT) ECB's Lane speech
     

FX Beat

DXY: The dollar index eased as several U.S. states imposed restrictions to curb the spread of the coronavirus as hospitalizations soared, highlighting the difficulty in containing the virus as winter in the Northern Hemisphere approaches. The greenback against a basket of currencies traded 0.1 percent down at 92.67, having touched a low of 92.13 on Monday, its lowest since September 1.

EUR/USD: The euro rose, drifting away from a near 1-week low hit in the prior session, as negotiators from the European Parliament and EU governments agreed the details of the 2021-2027 EU budget on Tuesday, in a crucial step for the activation of the bloc’s 1.8 trillion euro recovery package. The European currency traded 0.1 percent higher at 1.1832, having touched a high of 1.1920 on Monday, its highest since September 2. Investors’ attention will remain on ECB President Lagarde, De Guindos and Lane's speech, as U.S. markets remain closed in observance of the Veteran's Day Bank Holiday. Immediate resistance is located at 1.1860, a break above targets 1.1890. On the downside, support is seen at 1.1766 (21-DMA), a break below could drag it below 1.1745 (10-DMA).

USD/JPY: The dollar declined, extending previous session losses, as optimism about a coronavirus vaccine was offset by worries about how the drug will be delivered and by a surge of new infections in the United States. Initial optimism about coronavirus vaccine testing boosted the dollar, but the momentum started to fade because there are still several obstacles to clear before a vaccine can be distributed. The major was trading 0.1 percent down at 105.17, having hit a high of 105.64 on Monday, its highest since October 20. Investors’ will continue to track the broad-based market sentiment, as U.S. markets remain closed on account of the Veteran's Day Bank Holiday. Immediate resistance is located at 105.52, a break above targets 105.74. On the downside, support is seen at 104.77 (21-DMA), a break below could take it near at 104.48.

GBP/USD: Sterling held firm near a 2-month high, supported by comments from UK government officials that a deal was imminent on a post-Brexit trade agreement with the European Union. The major traded at 1.3270, having hit a high of 1.3280 earlier, it’s highest since September 4. Immediate resistance is located at 1.3300, a break above could take it near 1.3322. On the downside, support is seen at 1.3224, a break below targets 1.3200. Against the euro, the pound was trading 0.2 percent down at 89.14 pence, having hit a high of 88.83 on Tuesday, it’s highest since September 3.

AUD/USD: The Australian dollar surged above the 0.7300 handle, as a measure of the Australian consumer sentiment climbed for a third straight month in November to a 7-year high as consumers became more optimistic about the country’s economy. The Westpac-Melbourne Institute index of consumer sentiment released added 2.5 percent in November from October, when it had climbed 11.9 percent. The Aussie trades 0.4 percent up at 0.7309, having hit a high of 0.7339 on Monday, it’s highest since September 16. Immediate resistance is located at 0.7340, a break above could take it near 0.7369. On the downside, support is seen at 0.7254 (5-DMA), a break below targets 0.7230.         

NZD/USD: The New Zealand dollar rallied by more than 1 percent to a 20-month peak as the country's central bank introduced a new funding programme that would reduce costs for lenders, while held its benchmark interest rate at record lows and signaled its readiness to shift to negative rates to support the economy. The Reserve Bank of New Zealand held the official cash rate (OCR) steady at 0.25 percent, as markets expected, and re-iterated rates would stay there until March 2021.  The Kiwi traded 1.05 percent higher at 0.6891, having touched a high of 0.6904 earlier, its highest level since March 2019. Immediate resistance is located at 0.6924, a break above could take it near 0.6948. On the downside, support is seen at 0.6785, a break below could drag it below 0.6750.

Equities Recap

Asian shares surged as news of a working COVID-19 vaccine offset worries about surging infections in Europe and the United States.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 percent.

Tokyo's Nikkei surged 1.8 percent to 25,364.61 points, Australia's S&P/ASX 200 index rallied 1.7 percent to 6,449.70 points. South Korea's KOSPI gained 1.4 percent to 2,487.14 points.

Shanghai composite index fell 0.2 percent to 3,354.01 points, while CSI 300 index traded 0.6 percent down at 4,924.39 points.

Hong Kong’s Hang Seng traded 0.1 percent higher at 26,324.45 points. Taiwan shares rose 1.4 percent to 13,262.19 points.

Commodities Recap

Crude oil surged to an over 2-month peak after an industry report showed that U.S. crude inventories fell by more than expected as prices continued to be supported by news of successful trials of a vaccine for coronavirus. International benchmark Brent crude was trading 0.2 percent up at $44.06 per barrel by 0445 GMT, having hit a high of $44.16 earlier, its highest since September 4. U.S. West Texas Intermediate was trading 0.2 percent higher at $41.85 a barrel, after rising as high as $42.24 earlier, its highest since September 2.

Gold prices rose, supported by a softer dollar, while concerns about surging COVID-19 cases in the United States and logistical challenges over the mass roll-out of a potential vaccine further bolstered the safe-haven metal's appeal. Spot gold rose 0.2 percent to $1,880.05 per ounce by 0453 GMT, having hit a low of $1850.53 on Monday, its lowest since September 28. U.S. gold futures were up 0.2 percent at $1,880.20.

Treasuries Recap

The U.S. Treasury yields rose, with the benchmark 10-year note yield trading at 0.982 percent and the 30-year yield at 1.748 percent.


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