Analysis

USD is weakening against EUR, strengthening against JPY and moving horizontally against GBP

United States of America, USD is weakening against EUR, strengthening against JPY and moving horizontally against GBP.

In the first half of the day, the dollar was trading under the influence of European news. Investors are focused on the results of the British Prime Minister Theresa May and the head of European Commission Jean-Claude Juncker negotiations on the preparation of EU Brexit summit, as well as on the situation around the Italian budget.

October data from the US construction market did not disappoint the market. Building Permits fell from 1.270 million to 1.263 million but exceeded investors' expectations (1.260 million), and Housing Starts rose from 1.210 million to 1.228 million. October statistics on sales in the secondary housing market will be released in the evening, and it is also expected to be positive. The figure could rise from 5.15 million to 5.20 million, which will support USD.

Eurozone

EUR today is strengthening against the main competitors – USD, GBP and JPY.

European investors are focused on Brexit and the situation with the Italian budget. Today, British Prime Minister Theresa May will meet European Commission President Jean-Claude Juncker to discuss preparations for the EU Brexit summit on Sunday. European Commission has once again confirmed that the Italian budget for 2019 does not comply with EU rules due to the high level of public debt (2.4%), and announced its intention to launch an “excessive deficit procedure”, which could lead to the imposition of a fine on Italy. However, investors are encouraged by the comments of Deputy Prime Minister Matteo Salvini, who said he was ready for a dialogue on all issues of the new budget, except for the size of the national debt.

Great Britain

GBP is strengthening against JPY today, weakening against EUR and moving horizontally against USD.

British investors are focused on Brexit. Today, Theresa May will meet with European Commission President Jean-Claude Juncker to discuss preparations for the EU Brexit summit on Sunday. They will negotiate the dissatisfaction of some EU members with significant preferences of British fisheries companies, as well as Spain’s complaints about Gibraltar.

GBP is under pressure of UK October government borrowings, which increased significantly by 7.96 billion pounds.

Japan

JPY is weakening against its main competitors – EUR, USD, and GBP.

As there is a lack of significant economic releases, JPY is moving due to technical reasons. Investors are preparing for October inflation data publication on Thursday. It is predicted that after two months of growth, the Core CPI will remain at the same level of 1.0%, and Consumer Price Index will continue to grow for the fourth month in a row and will amount to 1.4%. The implementation of the forecasts can support JPY.

Australia

AUD is strengthening against its main competitors – JPY, GBP, USD, and EUR.

As there is a lack of significant economic releases, the movement of the Australian currency is technical in nature. Investors continue to discuss yesterday’s speech by the head of the RBA, Philip Lowe, who, along with the need to maintain the current monetary policy, recognized that the state of the housing market, whose performance has declined significantly in the past 18 months, may threaten the Australian economy. He saw the reason for this in the tightened lending rules and urged banks to take a more active and risky lending policy, otherwise, the Australian economy would suffer.

Oil

After yesterday's decline, oil prices are trying to grow.

The instrument is supported by API data, according to which the amount of oil in the United States has decreased by 1.545 million barrels for the first time in five weeks. On the other hand, serious growth is prevented by reports of a significant increase in oil production by Saudi Arabia. According to Bloomberg, in November, the country increased production to a record 10.9 million barrels per day. In the evening, investors are waiting for a report on US oil reserves from the EIA. It is predicted that they could rise again – by 2.500 million barrels. Realization of the forecast may affect the instrument negatively.

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