US Dollar Under Pressure as Risk Aversion Increased

Market Reviews

Risk aversion continues to dominate the markets, amid worries about rising yields on US bonds, the Sino-US trade war and political turmoil in Europe. US dollar and Swiss franc are weak. Australian dollar is trading as the strongest one for today so far, as lifted by stabilizing Chinese stocks, as well as improvement in business confidence. Japanese yen follows as the second strongest.

Global shares showed mixed results. NASDAQ closed down 0.67% at 7735.95, after reaching low 7654.84. S&P 500 fell by 0.04% at 2884.43. DOW closed up 0.15% at 39.73. In Asia, China Shanghai SSE gained 0.49%, paring some of yesterday’s -3.7% loss. Hong Kong HSI increased by 0.42%. Nikkei fell by 1.31% and Singapore Strait Times fell by 0.40%.

The International Monetary Fund (IMF) reduced global economic growth forecasts for 2018 and 2019, stating that trade policy tensions and import tariffs affect trade, while emerging markets are struggling with tighter financial conditions and capital outflows.

According to updated forecasts, global growth is projected at 3.7% (3.9% prior) in 2018, 3.7% (3.9% prior) in 2019. US GDP is forecast to be 2.9% (2.9% prior) in 2018, 2.5% (2.7% prior) in 2019. China economic growth is projected at 6.6% (6.6% prior) in 2018, 6.2% (6.4% prior) in 2019. Eurozone GDP is forecast to be at 2.0% (2.4% prior) in 2018, 1.9% (2.0% prior) in 2019. Germany growth is awaited at 1.9% (2.5% prior) in 2018, 1.9% (2.0% prior) in 2019. UK growth is expected at 1.4% (1.6% prior) in 2018, 1.4% (1.5% prior) in 2019. Japan growth is projected at 1.1% (1.2% prior) in 2018, 0.9% (2.9% prior) in 2019.

Today’s data showed, that business sentiment in Australia improved in September. Australian NAB Business Confidence rose to 6 in September, up from 5 and beat expectation of 5. Business Conditions increased to 15, up from 14 and beat expectation of 9.