ZFX: Recovery optimism overshadowed China-US tension
The three major Wall Street indexes rose on Tuesday as investors are betting on the reopening of the global economy. The US economic figures were generally better than expected, boosting optimism in the market. And, the news from coronavirus vaccine development was also positive to the sentiment.
Dollar fell across the board on Tuesday due to the unwinding of the safe-haven demand. Gold price also traded lower at around $1700 under the “risk on” mode.
However, the risk appetite faded out on Wednesday Asian session. Investors are now closely monitoring the growing tension between China and the US, which such worry caused a sell-off in RMB. The RMB dropped significantly to the lowest since Sept last year.
ZFX analyst Jacob Leung said that the move on Tuesday reflected that investors did not respond much to the China-US tension. However, any news from both sides, which may come in these days, can easily trigger risk aversion, especially if there is a wording called “sanctions”. It would be even harder for the global economy to resume normal after the pandemic.
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