Categories: Markets

Forex Today: Escalating Geopolitical Tensions Weighing Sentiment

Forex Today: Escalating Geopolitical Tensions Weighing Sentiment

This is what you need to know to trade today tuesday august 2:

The markets have turned risk averse amid escalating geopolitical tensions on Tuesday. The dollar remains relatively resilient against its main rivals and global stock indices remain lower. The Shanghai Composite Index is down more than 2%, the Euro Stoxx 600 Index is down 0.7% after the opening bell and US stock index futures are down between 0.55% and 0.9%. JOLTS job vacancies will be the only data on the US economic docket and investors will pay close attention to political developments. Chicago Fed President Charles Evans and St. Louis Fed President James Bullard will also speak later.

The news that the speaker of the US House of Representatives, Nancy Pelosi plans to visit Taiwan has caused safe-haven money flows to dominate financial markets during the Asian session:”There will be serious consequences if you insist on making the visit,” the Chinese Foreign Ministry spokesman said.Zhao Lijian. Additionally, Global Times commentator Hu Xijin tweeted that Beijing has formulated a series of countermeasures, including military actions, in response to Pelosi’s possible visit to Taiwan.

In the early hours of the day, The Reserve Bank of Australia (RBA) has announced that it is raising its interest rate by 50 basis points, to 1.85%., as expected. In its policy statement, the RBA has said the hike was a further step in “normalizing” monetary policy, but removed the term “extraordinary” stimulus from its statement. This change in language has put the AUD under severe pressure. At the time of writing, the AUD/USD down 1.4% on the day to 0.6925.

Pressured by risk aversion, the EUR/USD has erased much of Monday’s gains and extended its decline towards 1.0200.

The GBP/USD it has dipped below 1.2200 in the early European session on Tuesday and is now down 0.5% on the day.

Despite the drop in US Treasury bond yields, the Prayed is having a hard time preserving its upside momentum and is trading in negative territory near $1,770.

The Bitcoin is falling as market sentiment deteriorates and is now trading below $23,000. The ethereum continues to drop towards $1,500 after closing the last four days in the negative.

Source: Fx Street