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November 14, 2016

Market Outlook November 14: All rush into the Dollar.

Market Outlook November 14: All rush into the Dollar.

American currency strengthens growth on Monday reaching a 11-month high against other major currencies as optimism regarding the US economy during the presidency of Trump continues to support the demand for the dollar.

EURUSD fell by 1.23% to 1.0722, the lowest level since January. Dollar continues to rise on hopes that the upsurge in fiscal stimulus and tax cuts during a Trump administration can accelerate economic growth and inflation.

The Expectations of raise of interest rates in the US have not changed amid optimism that faster economic growth would allow the Fed to increase borrowing costs.

The Mexican peso remained under pressure, MXNUSD pair fell by 0.21% to 0.0480, keeping at a record low of 0.0467 on Friday. At a press conference last Wednesday the leadership of the Mexican central bank said that they keep an eye on fluctuations but refrain from any interventions.

GBPUSD fell 0.99% to 1.2567, falling from a five-week high on Friday at 1.2675. Meanwhile USDJPY pair rose by 1.51% to 108.29, the highest since June 3, while the pair USDCHF has risen by 1.07% to 0.9987.

Earlier in Japan, data showed that the economy grew faster than expected in the third quarter with GDP growth of 2.2% in annual terms, however, the report also pointed out that domestic demand remains weak.

The Australian dollar rose, AUDUSD pair fell by 0.09% to 0.7537, while the NZDUSD pair fell by 0.46% to 0.7081, stabilizing after two earthquakes.  USDCAD fell 0.21% to a nine-month high at 1.3571. USD index, which shows the performance of the US dollar against a basket of major currencies, rose 1.16% breaking 100 level, the highest since December 2015.

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Oil prices fell to a three-month low on Monday due to rising concerns of persisting oversupply and the weakness of oil prices in the next year, while the chances of an agreement on cutting  production by OPEC members, by contrast, is melting.

Futures for Brent fell by 1.23 per cent to 44.20 per barrel at the time of writing.

Futures for WTI brand of American Mercantile Exchange in New York at that time were trading around the level of $ 42.86 per barrel, or 1.26 below the previous close.

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Members of OPEC will be trying to agree on a reduction or freezing output at the November rally of the cartel in Vienna. As a result of an informal meeting in September in Algeria, OPEC agreed to reduce production in the range of 32,5-33 million barrels per day. But analysts doubt the ability of the organization to conclude an agreement, especially considering that in October, OPEC has set another production record of 33.64 million barrels per day.

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