Global stocks fell early in the session as investors continued to focus on Evergrande, the struggling Chinese real estate developer. The company is $ 4306 billion in debt, making it the most indebted real estate developer in the world. In a statement last week, the company said it may not pay its debt by hiring restructuring advisers. According to Reuters, he has started paying some of his wealth management clients using real estate. The wealth management product has approximately $ 40 billion in outstanding debt. A collapse of Evergrande is likely to cause significant ripples on a global scale.
The Australian dollar fell early in the session as investors focused on lower iron ore prices. Prices continued their descent today, adding to the 20% drop that occurred last week. Analysts attribute the performance to China’s decision to limit the amount of steel produced this year. In addition, the current Evergrande crisis could lead to a slowdown in demand for the metal, as banks keep property developers at bay. The company’s woes could affect the country’s economy due to the importance of the real estate sector.
The economic calendar will be relatively calm today, with most investors focusing on the Federal Reserve’s next interest rate decision slated for Wednesday. The bank is expected to leave interest rates unchanged and hint at a decline in the fourth quarter. The Swiss National Bank (SNB) will also issue its rate decision. He should leave rates unchanged and warn against overvaluing the Swiss franc. Other key data forecast for this week are US housing starts and existing home sales figures. In addition, investors will be attentive to the Canadian election and the ongoing campaign period in Germany.
EURUSD fell sharply as global risks increased. It fell to a low of 1.1725, which was the lowest since August. On the four-hour chart, the pair fell below the 25- and 50-day moving averages as the Relative Strength Index (RSI) fell near the oversold level. It also moved below the neckline of the head and shoulders pattern. Therefore, the pair will likely continue to move lower as bears target key support at 1.1650.
USDCHF remained stable as investors refocused on upcoming Fed and SNB interest rate decisions. The pair reached 0.9321, which was significantly higher than all moving averages. It also broke through the key resistance level at 0.9235, which was the highest in recent months. It was also the upper side of the ascending triangle. Therefore, the pair will likely continue to rise as investors target key resistance at 0.9400.
GBPUSD fell to 1.3727, its lowest level since August. On the hourly chart, the pair managed to break below the key support levels at 1.3763 and 1.3798. It also went under the Ichimoku cloud and moving averages. The pair will likely remain under pressure as bears target the key support level at 1.3650.