Bullet Report | GBP tries to recover but lacks the momentum

Fallout from the Brexit is still dominating the markets which have stabilized after wild swings. Traditional safe haven currencies which get stronger at times of insecurity and fear, such as USD, CHF and JPY have lost value overnight as market sentiment improved both in US as well as Europe and Asia. Several data releases are due today, however they were collected before the UK referendum so in essence they will show nothing new.

Currencies: GBPUSD was the biggest gainer yesterday as the pair had its first rebound after Friday. GBPUSD rose from 1.3215 to 1.3420 before trading at 1.3302 at time of writing. EURUSD remains a in a very tight range between 1.1010 and 1.1090. USD overall gained yesterday, following a stronger than expected GDP and consumer confidence data. It did however slide in the Asian session amid the improved risk sentiment. USDJPY usually benefits from a risk-on environment, but not tonight. The pair opened around 102.80 in Sydney, but then declined to 102.25 after the Tokyo open.

Stocks: Overnight, US stocks rose for the first time in 3 days, recovering some of the brutal losses experienced post Brexit. DJ closed 1.6% higher while SP500 added 1.8%. Despite the gains, investors are cautious about the rebound given the fact that sentiment still remains fragile. In Asia, shares also rebounded, giving hopes for a further recovery from the drop of last week, which wiped away $3 trillion in stock value in the 2 days following the Brexit vote. For now, investors are counting on central banks to step in with fresh stimulus to support markets over time.

Oil and Gold: Gold gained in Asia on Wednesday as investors noted continued friction over the timing of Britain’s expected notification to exit the European Union. Gold has become a preferred option for anxious investors along with low-risk government bonds and currencies such as the USD JPY and CHF. Oil prices rose on Tuesday, pushed higher by the threat of union strikes by Norwegian oil and gas workers and expectations of another drop in U.S. crude inventories. U.S. crude for August delivery settled up $1.52, or 3.3%, at $47.85 a barrel. Brent rose $1.42, or 3%, to $48.58 a barrel.

The post Bullet Report | GBP tries to recover but lacks the momentum appeared first on Forex.Info.

Source:: Bullet Report | GBP tries to recover but lacks the momentum

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