LONDON / SINGAPORE (Reuters) – The euro traded to an 18-month high on Wednesday as financial markets continued to bask in the glow of the EU funds recovery agreement, while a boom in precious metals led to recent gains in the silver at 20% and gold at a maximum of nine years.
FILE PHOTO: The signage is seen outside the entrance to the London Stock Exchange in London, Great Britain. August 23, 2018. REUTERS / Peter Nicholls / File Photo
China’s news that the United States had told it to close its consulate in Houston caused a risk aversion attack on European trade, but the stock markets had consolidated after their recent increases anyway.
Asian stocks had spent most of the day faltering and Europe’s morning slump [.EU] Added to the list of spins that keep merchants busy.
Silver XAG = gained 5% to a six-year high of $ 23 an ounce before profit taking occurred. Gold XAU = maximum of $ 1,865 per ounce brought its earnings this month to almost 20%.
The euro was above $ 1.15 EUR = for the first time since early 2019, and despite a slight rally in Houston headlines, the dollar = USD was at its lowest level against a basket of major currencies worldwide since March.
“With the United States struggling with the pandemic, there is a growing divergence in growth expectations with Europe and the Asia Pacific,” said RBC analyst Alvin Tan.
“We will be watching what is happening in Houston, but the fact is, in a typical upward cycle in the global economy, the dollar tends to underperform, of course.”
Chinese Foreign Ministry spokesman Wang Wenbin told a daily news conference that the United States had abruptly told Beijing on Tuesday to close its consulate.
“We urge the United States to immediately reverse this erroneous decision,” he said. “If you insist on following this wrong path, China will react with firm countermeasures.”
China’s offshore yuan weakened more than 7 per dollar on the news and was last at 7,0028 CNH = EBS. The dollar index rose 0.2% from the March lows it had reached on Tuesday.
“That headline sparked quite aggressive profit taking at USDCNY, USDCNH,” said Christy Tan, director of market strategy for Asia at the National Australia Bank in Singapore.
“It is a time problem. All of this comes as tensions between the United States and China are mounting. This added fuel to fire, ”he said.
PEDAL TO THE METALS
The pan-European STOXX 600 extended its early decline to drop 1% at 0900 GMT. Commodity-linked stocks .SXPP along with .SXTP travel and .SXAP cars provided the biggest drags with declines of around 2%.
S&P 500 ESc1 futures fell 0.5% after Tuesday’s mixed session on Wall Street, amid concerns over rising US coronavirus cases and political disagreement over the upcoming package of US tax aid
The United States reported more than 1,000 deaths from COVID-19 on Tuesday, the first time that bleak milestone has been reached since June. President Donald Trump warned that things would likely get worse before they got better.
The euro was last at $ 1.1515 EUR = after rising to 1.1547, its best level since January 2019. The Australian dollar AUD = D3 held close to an annual high of $ 0.7144 which was bolstered by optimistic sales data. Australian retailers.
Copper prices fell 1.3% after Houston CMCU3 headlines. Shanghai SCFcv1 and Dalian DCIOcv1 iron ore futures rose for the second straight session on expectations of strong Chinese demand.
Oil prices remained within the range, affected by inventory concerns. Brent LCOc1 futures fell 0.4% to $ 44.14 per barrel and US crude oil fell 0.5% to $ 41.70 per barrel.
Marc Jones Reports, Larry King Edition
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