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Daily market commentary: The pound is coming under pressure, heading for lows not seen since April



FOREX

The dollar and the yen are gaining on the other major currencies during early Monday trading. Demand for the two safe-haven currencies usually increases when risk appetite diminishes in the markets, which is what appears to be happening this morning, amid growing investors’ concerns about the global spread of the Delta variant. Meanwhile, the pound is coming under pressure, heading for lows not seen since April, despite the arrival of the so-called ‘Freedom Day’ which marks the ending of almost all COVID-related restrictions. Investors are showing nervousness at a time when the country is averaging close to 50,000 new cases a day, fearing that the relaxation of all rules now may eventually lead to negative social and economic outcomes.

Ricardo Evangelista – Senior analyst, ActivTrades

daily market analysis

OIL

Oil is following today’s bearish trend with market sentiment weighed down by the latest OPEC+ supply deal, which put an end to a 10-day dispute between Saudi Arabia and the UAE. With that deal confirmed, OPEC countries will now produce more, putting more oil on global markets to cope with an expected rise in demand. However, this had an immediate negative impact on oil prices as global demand remains weighed down by the spread of the virus and the difficulties people have travelling, due to lingering restrictions and fears over the Delta variant. Technically speaking, crude remains in its mid-term bearish flag, currently trading below $70 with the $68.95 and the $67.20 levels in sight.

Pierre Veyret– Technical analyst, ActivTrades

EUROPEAN SHARES 

European stocks slid significantly lower, with all sectors in the red amid decreasing risk appetite from investors. The accelerating spread of the Delta variant combined with rising inflation are weighing on today’s market sentiment. Investors are fleeing riskier assets and increasing exposure to more defensive instruments such as Treasuries, with the traditional lower summer liquidity. Even if today’s declines are more of a market correction, bull traders will need significant macro hints to drive stock prices higher and back to their record levels. That said, most investors will be focused on earnings season as well as key data from both the US and the ECB, with tomorrow’s rates decision.

Pierre Veyret– Technical analyst, ActivTrades


Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.

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Daily market commentary: The pound is coming under pressure, heading for lows not seen since April

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