ZFX: “risk-on” sentiment boosted by the latest figures
On Wednesday, the latest ADP report showed that the job cuts in the US was much less than expected, implying that the worst period may be over and the overall economy may recover earlier.
The figures further boosted optimism on global economy reopening, dominating the financial markets despite civil unrest in the US and the tension between China and the US.
Gold and greenback were under pressure due to the improving risk sentiment on Wednesday. Gold price once hit $1690 level and the dollar index reached the day low of 97.19.
However, in Asian session on Thursday, the market sentiment was cautious. Shares in Asia were mixed and the dollar bounced back.
ZFX analyst Jacob Leung said that the market may be over “priced in” the bullish views from the prospects of economic recovery. Also, it should be noted that the decline of the dollar has slowed down. A reversal or an adjustment is likely to happen. China-US tension is still brewing which is a significant risk that can easily bring the strong dollar back.