The Reserve Bank of Australia (RBA) left official interest rates at the historical low of 0.25% on its monthly meeting on Tuesday. RBA governor Philip Lowe said, "Uncertainty about the health situation and the future strength of the economy is making many households and businesses cautious, and this is affecting consumption and investment plans," He pledged to not improve the money price goal till progress was made in direction of full employment and the board was assured inflation can be sustainably inside the 2-3% goal band.
European stocks fell to the session low on Tuesday after the European Commission lowered its GDP forecasts for 2020 and 2021, with the Eurozone economy seen contracting by a deeper 8.7% this year. Meantime, the eurozone agreed on Tuesday new debt relief measures for Greece worth about 750 million euros ($840 million) as part of the country’s post-bailout programme. On Monday. Wall Street closed higher, stocks of the biggest companies once again led the way, and strength for Apple, Amazon and other tech-oriented titans helped lift the Nasdaq composite 2.2%, to a record high of 10,433.65.
Crude oil prices trading slightly weaker on Tuesday ahead of API report which will release later today. Last week, the American Petroleum Institute reported a larger-than-expected crude oil stock draw from previous 1.749M to -8.156M on June 26.
The US dollar recovered from the previous session losses supported by strong US ISM Non-Manufacturing PMI print for June indicated that the world’s largest economy is starting to recover. The Australian dollar edges lower during the European session after the mixed comments from RBA and a six-week lockdown of the Melbourne area announced in reaction to a surge in Covid-9 cases.
Gold price retreat from 8- year high and trading around $1775 on Tuesday. During the previous session, the yellow metal price climbed to fresh week high supported by the new wave of the coronavirus in several countries.
On the data front, the German industrial production rebounded 7.8% in May, less than 10% anticipated by analysts. On Monday, the US economic data showed the ISM Non-Manufacturing PMI moves from contractionary to expansionary level at 57.1 compared to 45.4 for the previous month.
The number of people infected with the coronavirus across the world surpassed 11.6 million, of which around 538 thousand have died, according to Johns Hopkins. The USA has had the most recorded cases, with just under 3 million. Currently, the US, Brazil and India are the top-three countries severely impacted by the COVID-19 pandemic. South Africa’s coronavirus cases have passed 200,000, the highest total in Africa. Spain reported new data for the first time in three days, with the number of cases rising by 1,244 during the last weekend.
NZD/USD: The currency pair retreat from the 4- week high and trading below 0.6530 during the European session.
The important levels to watch for today: Support- 0.6510 and 0.6480 Resistance- 0.6585 and 0.6610.
EUR/USD: The currency pair slips back to below 1.1300. During the previous session, the bulls have been unable to break above 1.1350.
The important levels to watch for today: Support- 1.1240 and 1.1190 Resistance- 1.1320 and 1.1350.
Quote of the day: The best stock to buy is the one you already own- Peter Lynch.
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