The euro soared against its G10 peers after hawkish comments from ECB President Mario Draghi last night. 

Draghi said the central bank saw signs of unquestionable improvement in eurozone growth, and aimed to start discussing possible tapering plans in the fall. The euro jumped close to a 14-month high against the greenback, to the 1.1624 area this morning. EUR/USD has broken above the key resistance level of 1.158 (100% Fibonacci extension) and is about to challenge the next Fibonacci level at 1.168 area.

The US dollar index, however, slumped to the 94.13 area overnight, its lowest level since August. The weak dollar is expected to boost US exports and reduce the country’s trade deficit in the months ahead. 

US equities remained buoyed on strong earnings and the weakened dollar. The Nasdaq marched to fresh highs while the S&P and Dow stayed at record levels. This could be the calm before the storm, however, as the US special counsel has expanded its investigation into President Trump’s potential ties with Russia to include a broad range of transactions involving Trump’s business empire and Russian counterparts. Noone knows whether the ongoing White House drama will ignite fearful sentiment in the stock market. 

Asian markets closed mixed on Thursday, with Hong Kong and China shares extending gains while Singapore shares tumbled during the last few hours of trading. 

Nam Cheong

Singapore-listed Malaysian shipbuilding and offshore service provider Nam Cheong requested a ‘temporary cease’ of all debt repayments, and sought debt restructuring. The company still has some S$586 million debt outstanding. Nam Cheong’s troubles come on top of some S$1.35 billion of defaults in Singapore's bond market since late 2015, according to data compiled by Bloomberg. Market confidence was hurt by renewed concerns over Singapore’s oil & gas sector and its contagious effect on the banking system. 

Technical analysis:

EUR/USD

  • 10-Day Simple Moving Average is sloped upwards
  • SuperTrend (10,1.5) also sloped upwards
  • Broken out above the 100% Fibonacci extension level, with the next resistance level at 1.687 area (123.6% Fibonacci level)

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