Source: Forex News
There are no economic announcements scheduled for release in this new week that has begun with the Almighty Dollar losing value against all other currencies. After rallying for most part of the month. The USD index lost 0.70% against a basket of other currencies, adding to Friday’s small losses. Upcoming events that could stir up volatility are now the OPEC meeting and the Italian Referendum on December 4th. The market will also focus on the all-important US Non-Farm Payrolls on Friday.
Currencies: : Dollar index dips to as low as 100.64 so far, comparing to last week’s high at 102.05, but stays well above 100 handle. EURUSD recovered all the way to 1.0685 from 1.06 levels while the USDJPY dropped to 111.33, all the way from 113.85 which was Friday’s highest point. Adding to the risks for Dollar Bulls, is the fact that Hilary Clinton’s case for a vote recount is gathering steam. Should a recount happen, this would be extremely negative for the USD which has gained massively in value ever since Republican Donald Trump has been elected US President.
Oil and Gold: Oil prices have taken a beating since Friday ahead of the OPEC meeting today where a supply cut was to be discussed. Saudi Arabia though had said on Friday that it would not attend this meeting as the country believes that the oil market will balance itself in 2017 even if producers did not intervene. As lower OIL prices lead to lower inflation (which leads to lower interest rates thus a lower Dollar) we could see oil driving Dollar’s strength in the next weeks. Oil traded as low as $45.13 this morning, compared to $48 on Friday and $49.21 highs posted earlier last week. Gold also reversed its losses on the back of a weaker USD. The Yellow metal posted a new low of $1171 last week but managed to rebound to $1193 at time of writing.
Stocks: Markets haven’t reflected the big move of the Dollar overnight. Japan’s Nikkei which had performed better than Wall Street thanks to the JPY’s drop, ended down -0.1%. European stocks today have opened marginally lower. US stocks all hit record highs last week, something that was last time done in 1999. Some investors though, are now questioning whether the stock markets and the USD have gotten carried away with over optimism as to Trump’s policy and speculate that a large portion of those gains could be reversed if there are signs of these policies being harder to materialize that initially expected.
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