On Tuesday, we see that markets are tired of being negative and grabbing any positive data to grow. The global picture of the pandemic is more gentle and countries are optimistic about the future. Import and export data show that China is beginning to recover from a severe quarantine and is launching production. Chinese business activity is returning to normal and that is a very good sign.
Due to good news on the fight against the pandemic and data from China, American markets are growing by more than 2% on Tuesday. Investors are tired of selling and the desire to buy wins. If the tendency to fight the coronavirus is improving and countries get positive statistics on diseases, investors will be more willing to take risks and buy further.
The European currency has no strength at all to go up, although on Tuesday we see growth, but it is very small. After taking stimulus measures, investors did not react at all. On Tuesday, the euro is growing more due to the weakness of the US dollar. Investors believe that the dollar is overvalued in the current situation. The Fed’s balance jumped up to a record 6.13 trillion dollars and it should certainly put pressure on the rate.
If the disease statistics in the US improves, it will strongly affect the US currency, which is not a very good sign for the Euro. The current rise to 1.10 is probably a correction before the decline, which might start very soon.
China showed good trade balance dynamics, and there are all signs that the economy is recovering. Australia is very much dependent on China, as it supplies enough different raw materials. On the background of positive data investors expect the Australian economy to improve. The Australian dollar keeps growing for the second trading week and trades at 0.6420 on Tuesday. In the medium term, AUD/USD will rise to SMA 200, which is at 0.6700, but only if China and the rest of the economy are stable in the near future.
At the moment, it is already clear that gold sales should not be considered. There was a lot of debate about whether the metal could pass the mark of $1700 per ounce, but after the beginning of the epidemic in China it was already clear that gold would be there very soon. Next, we will look at the volume of liquidity that will appear in the market in the near future and it is quite possible that some part will go to buy the precious metal. So maybe this year gold will try to conquer historical highs. The road for this is open and there is not much left.
What’s waiting for us today?
09.00 Consumer price index in Spain for March
14.30 Basic US Retail Sales Index
16.30 US crude oil reserves
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