- Global stock markets bounced back strongly yesterday as the U.S. Federal Reserve signaled it would do everything it could to support the economy for as long as it takes to complete the recovery, and that the time is not yet ripe to pare the policy stimulus. The chairman of the Fed will be testifying before Congress today.
- The EUR/USD currency pair is still likely to see lower prices over the coming days following its technically significant breakout to new 50-day low prices on Friday. The USD and JPY are clearly the strongest major currencies right now, while there is significant short-term weakness in the euro, the British pound, and the Australian dollar.
- WTI Crude Oil rose strongly yesterday to reach another 2.5-year high price just below $74. The commodity seems well-supported at technical levels and therefore likely to rise to higher prices.
- Major cryptocurrencies such as Bitcoin and Ethereum continued to fall yesterday, with each trading very close to long-term low prices at pivotal points which are threatening to break down. Bitcoin has recently seen a bearish “death cross” where its 50-day moving average crossed below its 200-day moving average, typically a bearish sign in a speculative market. A further breakdown today could lead to very sharp falls in value. Levels to watch are $30k for Bitcoin and $1726 for Ethereum.
- Last week saw a seventh consecutive weekly fall in global new confirmed coronavirus cases and deaths, suggesting that the current wave of the pandemic is starting to retreat. The effects of the vaccination programs in the most developed economies are now being felt.
- There are concerns that the Delta (Indian) variant is becoming globally dominant as it spreads very easily and seems more resistant to vaccines than previous strains.
- It is estimated that 21.8% of the world’s population has received at least one vaccination against the novel coronavirus.
- Total confirmed new coronavirus cases worldwide stand at over 179.5 million with an average case fatality rate of 2.17%.
- The fastest progression in terms of immunizing a population against the coronavirus in all but the smallest states has been in Iceland, Bermuda, Kuwait, Bhutan, Israel, Chile, and Canada, which have given at least one shot to between 70% and 63% of their respective populations. For most of the world, a vaccine still remains distant. However, the pace of vaccination in the European Union, which now has immunized 47% of its population, has picked up significantly. In the U.S., 53% of the population has been vaccinated.
- The rate of new coronavirus infections appears to now be increasing most quickly in Algeria, Bangladesh, Brazil, Burma, Cuba, El Salvador, Fiji, Indonesia, Iraq, Kenya, Kuwait (despite its very high level of vaccination), Kyrgyzstan, Mongolia, Oman, Panama, Russia, South Africa, Tunisia, Uzbekistan, Vietnam, and the United Kingdom (despite its high level of vaccination).
Forex Today: Stocks Make Strong Recovery on Fed Comments
Adam Lemon
Stock markets saw a strong advance yesterday as the Fed signaled it would do whatever it takes to preserve the economic recovery.