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European Shares Slid, Gold Retreated Amid Profits Taking Sessions

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European shares slid on Wednesday as escalating U.S.-China tensions and a surge in coronavirus cases dented sentiment.

Gold traded 1.8% lower on Tuesday from an all-time peak amid profits taking sessions, with the focus turning to the U.S. Federal Reserve policy stance.

FX Markets :

EUR/USD retreated from its 2-year high on Tuesday as weakness in dollar waned ahead of two-day Federal Reserve meeting. No monetary policy changes are likely, but traders are speculating about a change in emphasis in the Fed’s forward guidance at the meeting, which starts on Tuesday. The pair was last trading 0.2% lower at $1.1708 , after hit the $1.1781 two-year high reached the day before.

GBP/USD retreated from a 4-month high on Tuesday as a broad U.S. dollar rout over the past week ran out of steam with negative news from Brexit negotiations prompting hedge funds to take profits. Concerns about the lack of progress of Brexit negotiations also prevented the pound from pushing above the $1.30 levels. The pair slipped 0.08% at $1.2870 after rising to its highest level since March at $1.2977.

USD/CHF declined on Tuesday as investors worried about the damage from the coronavirus to the U.S. economy and await the latest outlook from the Federal Reserve and the passage of a new fiscal rescue package. Pressure on the greenback has been relentless since the end of May, as faith in a global economic recovery from the pandemic has grown stronger and other currencies have rallied.

USD/JPY declined on Tuesday as hopes for a dovish message from the U.S. Federal Reserve weighed on greenback. The U.S. dollar index is down around 9% from its March highs and is on track for its worst month since 2011, pressured in part by expectations that the United States will take a bigger hit to growth than other economies from the coronavirus pandemic.

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