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Market review

from 26 to 30 June
Artem Alekseev Аналитик «Olymp Trade»
Artem Alekseev
Аналитик «Olymp Trade»
Monday, June 19, 2017 this week turned out to be a fruitful one for Asia Pacific countries, especially for Japan: On June 19 after news of the trade balance came out, the Japanese currency continued to weaken against the dollar and got to the 111.3 mark, almost reaching Friday’s highs.
Statistics indicated that Japanese exports grew by 14.9% on an annual basis (May 2016 – May 2017) to 5.85 trillion yen, which is a local high for the last few years. But imports also grew, reaching the 6.05-trillion-yen mark, increasing 17.8% on an annual basis (May 2016 – May 2017).
The European region also did fairly well at the start of trading. As a result of the elections in France, Emmanuel Macron and his allies won an absolute majority (350 of 577 seats). This gives him all the freedom he needs, including the ability to amend labor laws. The majority of European indexes traded up, including the Euro Stoxx 50, CAC 40, and DAX, which rose a little more than 1%.
American trading on Monday was no exception. It also started on a positive note: the majority of indexes continued to rise after the opening bell, reaching last week’s near-peak or even peak values.
The strengthening dollar also started putting pressure on oil prices.
Tuesday’s, June 20, 2017 oil market continued a streak of bad days and, on the evening of June 20, was trading deep in the red.
Some indexes and the stocks of a number of companies fell in price on the bad news in the commodity sector. Asia-Pacific indexes closed mixed. Only Japan's Nikkei 225 remained positive (+0.81%), strengthening on growth in the shipbuilding, transportation equipment, and mineral production sectors.
European trading likewise was unable to achieve an upward trend. General restraint after news of the success of the initial Brexit negotiations and the adverse trend in commodities also played a role in this.
European currencies also ended up in a kind of parity: The EUR/USD tried to rise in European trading, but again ended up far from the 1.1140 mark by the close.
On Tuesday, the GBP/USD continued its robust decline after the head of the Bank of England stated that an interest rate hike is premature.
On Wednesday, June 21, 2017 European currencies regained some of their losses on the US dollar’s decline: the EUR/USD pair was able to break through 1.115, although it was unable to stay there.
The pound sterling was trading similarly: the GBP/USD pair took off from its Tuesday lows and rose to 1.27 and beyond, but fell, and is now trading close to 1.2672-1.265.
Thursday, June 22, 2017 European indexes began declining more steeply on investors’ uncertainty. An additional factor in the fall was a mild dollar rally, which drove quotes for both the euro and the pound sterling down. The EUR/USD dove to 1.1143; the GBP/USD pair to 1.2656. In the case of the pound, this might be called a success after its attempt to test 1.265 the day earlier.
There was likewise no definite trend in trading in the Asia-Pacific region: The Nikkei 225 closed at almost the same mark as before, falling just 0.07% after a number of attempts to rise. South Korea’s KOSPI was in the same boat: It tried to rise for the entire trading week, but by closing it had also returned to where it started. The USD/JPY rose in the first half of the day with a target of 111.4, but by evening changed direction to consolidate at 111.24.
Friday, June 23, 2017 On Friday, oil was again searching for support at $45-46/barrel, rebounding from a slightly cheaper US dollar. There were 747 drilling rigs by the end of the week, an increase of 6 for the week; growth by another 6-8 rigs is forecast. Statements from OPEC representatives, who have started thinking about larger cuts in oil production, are turning out to be a support for oil.
Asian trading on Friday ended moderately up: most of the indexes were trading in green territory, with a rare exception. The USD/JPY pair was trading at 111.28 by the end of the week, tending toward a decline. Other Asian indexes were mixed on Friday: South Korea’s KOSPI rose about 0.35%, China’s Shanghai Composite about 0.33%, while Hong Kong’s Hang Seng lost about 0.02%.
European trading continued its downtrend: all European indexes are still trading in the red against investors’ uncertainty over Brexit. The majority of traders believe that stocks are a high-risk asset. This may have a long-term negative impact on the EUR/USD and GBP/USD pairs.
The overall situation with the US dollar over the week may mark a strengthening trend for the US national currency relative to European and Asian currencies.

Composite Core Currency Table:

    EUR/USD: -0.22%

    CAD/JPY: 0.25%

    USD/JPY: 0.40%

    USD/CAD: 0.15%

    EUR/JPY: 0.18%

    GBP/USD: -0.40%

    EUR/GBP: 0.18%

    USD/CHF: -0.28%

    AUD/USD: -0.70%

    AUD/JPY: -0.31%

    GBP/JPY: -0.02%

    CHF/JPY: 0.66%

    EUR/CAD: -0.07%

    AUD/CAD: -0.56%

    NZD/JPY: 0.80%

    NZD/USD: 0.41%

    AUD/NZD: -1.10%

    GBP/AUD: 0.30%

    EUR/AUD: 0.48%

    EUR/CHF: -0.49%

    GBP/CHF: -0.68%

    EUR/NZD: -0.68%

    AUD/CHF: -0.97%

    GBP/NZD: -0.81%

    GBP/CAD: -0.26%

    BTC/USD: 8.45%

    USD/RUB: 3.25%

    USD/MXN: 0.74%

    USD/SGD: 0.25%