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ZFX: More than two-year low! Weak dollar continues amid cautious markets
European stock markets opened lower in early trading on Monday. The markets are now waiting for more hints, after the rally driven by positive vaccine news.
Asian stocks were closed lower, with a better than expected PMI figures from mainland China. However, after investors have digested the news, the markets seem to lose its momentum. At this moment, stock futures in the Wall Street dipped a bit, retracing from the recent record highs.
Analysts believe that tensions between China and the US may be one of the reason for such bearish sentiment on Monday. It is reported that Trump administration may add more Chinese firms to the sanction list, including chipmaker SMIC and oil and gas producer CNOOC, hurting the risk appetite of investors.
This week, oil prices would still be key focus in the markets as OPEC and allies led by Russia will discuss whether they will extend the production cuts plan in 2021. Every traders will pay closely attention to the decision made after the meeting by those major oil-producing countries.
Oil prices were weaker in the early session on Monday, while WTI is trading at $44 level and Brent is trading at $47 level.
Gold price tumbled last week, downward breaking $1800 level support. The positive news of various COVID-19 vaccines drove optimism of economic recovery. Although the recovery is on the “slow” track, investors are expecting “the worst has passed”, lowering the safe-haven demand.
Investors also keep their eyes on the testimony Congressional by the Fed Chairman Jerome Powell this week. The latest minutes of FOMC stated that the members are discussing how to inject more money into the economy, stimulating the job market that seriously affected by coronavirus pandemic. Of course, further clues of policy direction may be found in Powell’s speech.
The dollar index dropped to 91.7 level on Monday, following the recent downtrend since November, declining from above 94 level. The dollar keeps testing a more than two-year low, that mainly driven by the vaccine optimism and the easing policies expectations of the US side.