Mixed session on the Old Continent, GBP sinks on Brexit concerns

Summary:

• USD advances against most major currencies

• No-deal Brexit fears hit GBP

• UK100 moves significantly higher amid weak domestic currency

• RBNZ to make its decision in the late evening

The key piece of data scheduled for Wednesday has been released in the morning and concerned trade figures from the Chinese economy. However, the day is not over and DOE report as well as RBNZ decision may impact the markets in the later part of the day. Equities in Europe are trading mixed with quite a noticeable gain seen on the UK stock market as domestic companies are being boosted by weaker pound. On the other hand, Russian companies are experiencing quite a heavy sell-off. On the FX market one can name JPY and USD as leaders among majors while earlier mentioned GBP and SEK are trading lower against most of its G10 peers. As the greenback is appreciating the precious metals are moving lower. Oil prices are also declining today. Apart from that, industrial metals are trading higher on the day with copper being the sole exception.

Wednesday draws quite a pessimistic picture of the cryptocurrency market with Bitcoin’s decline below the $6500 handle in the spotlight. Over the past 24 hours major virtual currencies pushed lower sending the capitalization of the whole market to around $230 billion. At the same time, the Bitcoin market capitalization sits a notch above $110 billion.

In spite of the fact that US traders took US indices close to their highs, European markets have begun Wednesday’s trading on a softer footnote. One explanation behind such a scenario might be quite a heavy decline in the Chinese Shanghai Composite which ended the day 1.3% lower even as the country’s trade data turned out to be quite reassuring.

The US dollar is giving back its prior gains while Chinese indices are trading mixed in the morning despite another robust session on Wall Street. The paramount event of the Asian session came from China as the trade data for July were released. Notice that the numbers are the first insight into the new reality after the US tariffs on $34 billion Chinese goods came into effect on 6 July.

The Reserve Bank of New Zealand has been keeping the level of interest rates unchanged since 10 November 2016 and this streak is likely to be extended this month as well. However, at its latest meeting at the end of June the RBNZ said that a change in rates might be either up or down (despite the ongoing tightening in the other parts of the world).