Daily market commentary: The Pound touched year lows against the Dollar


Daily Market News

ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for July 9, 2019. See details below:


FOREX/BREXIT

The Pound touched year lows against the Dollar on Tuesday, trading below $1.2490. Sterling’s fall is explained by ongoing Brexit uncertainty and a slow down in economic activity. Construction and manufacturing activity contracted in June and a survey of economists point to a shrinking of the UK economy in Q2 2019, something that is happening for the first time since 2012. It is therefore very likely that the Bank of England will follow other major central banks and embark on a new programme of stimulus, which is likely to begin with a rate cut. The stars are aligned and we should expect some rough times ahead, for the British Pound.

Ricardo Evangelista – Senior Analyst, ActivTrades

GOLD

Gold’s bullish trend is showing some weakness after the price was unable to hold the key level of $1,400, while the greenback is continuing its recovery. It appears clear that investors are now cautious about the next Fed decisions, after the NFP report last week certified a US job market still solid. From a technical point of view, after five days in a row of decline, gold is now approaching the support level of $1,380, which was able to support prices last week. A rebound on these levels would be crucial for confirming the current positive mode of bullion.

Carlo Alberto De Casa – Chief analyst, ActivTrades

EUROPEAN SHARES

European shares are extending yesterday’s losses, following a mixed trading session in Asia where tensions between Japan and South Korea scared stock investors. In Europe, and even globally, investors’ sentiment is still being slashed by last week’s better than expected US job report.

Most traders who were anticipating a more dovish Fed due to a global slowdown caused by President Trump’s trade war with China have shifted their trading stance. Investors are seeking to diversify risk across other asset classes like US Dollars or even cryptocurrencies, rather than traditional safe heavens like Gold or Swiss Francs, which means the Risk-on sentiment is still alive. However, volatility is likely to be low today as most investors are waiting for the key testimony from Jerome Powell to the US Congress tomorrow, in order to get some clue to the Fed’s monetary policy.

The DAX-30 index is the most shorted European index today as the market came back to a major support located towards 12,420 pts. The Stoxx-50 index is also bearish this morning, trading below 3,500 pts, with 3,480 pts as the first major support zone. In the UK, GBP markets remain calm before tonight’s TV debate between the candidates in the race to be the next Prime Minister. The FTSE-100 trades toward 7,475 pts in a corrective move started at the end of last week, but seems to have found support over the 7,465 pts zone in low volumes.


Pierre Veyret– Technical analyst, ActivTrades

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Daily market commentary: The Pound touched year lows against the Dollar

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