Analysis

GBP is strengthening today against its main competitors - EUR, USD, and JPY

United States of America, Today, the US dollar is weakening against its main competitors - the euro, the pound, and the yen.

Thanksgiving Day is celebrated in the USA and the stock exchanges are closed, so all investors are focused on European issues of Brexit and the Italian budget. The text of the agreement on Brexit was fundamentally approved by the parties, after which USD rapidly declined against European competitors. Speaking of the Italian budget for the next year, it is not yet clear whether the European Commission will impose a fine or enter into negotiations with the Italian government, especially since Deputy Prime Minister Matteo Salvini said he was ready for them.

Published yesterday, data on sales in the secondary housing market were strong. In October, the figure rose from 5.15 million to 5.22 million. However, these statistics did not provide significant support to the dollar.

Eurozone

Today, the euro is strengthening to the US dollar and the yen but weakens to the British pound.

European investors are focused on Brexit and the Italian budget. Today, the head of the European Council, Donald Tusk, announced a principled political agreement of the parties with the text of the Brexit treaty. Now it must be approved separately by all 27 EU member states. This is expected to happen on November 25th. However, according to Margaritis Schinas, the EC representative on Media Relations, the controversial issues concerning fishing and Gibraltar have not yet been agreed. However, there is a chance to settle them. At least, British Prime Minister Theresa May, Spanish Prime Minister Pedro Sanchez, and the authorities of Gibraltar are already negotiating. It is not yet clear whether the European Commission will go to the end and impose a financial penalty on Italy or will seek a compromise with the new government.

On Friday, preliminary November data on indices on Manufacturing and Services PMIs of the Eurozone is expected to be published. According to forecasts, the Manufacturing index will remain the same at 52.2 points, while for the Services one will decrease from 53.7 to 53.5 points. Probably these data will not provide significant pressure on EUR.

United Kingdom

GBP is strengthening today against its main competitors -  EUR, USD, and JPY.

The pound rose sharply after the announcement of a fundamental agreement on the text of the transaction between the EU and the UK. According to the agreement, the transition period after the UK’s withdrawal from the EU can last up to two years, while the countries will maintain a free trade zone and extensive customs cooperation. Teresa May still has to resolve the issue with Spain, which requires a separate agreement for Gibraltar, but it will probably be resolved before the EU summit on Sunday. The main danger for the agreement now seems to be its failure in the British Parliament, so the parties continue to prepare recommendations for all sectors of the economy in case of a “hard” Brexit.

Japan

Today, the yen is weakening to the euro and the British pound, but is strengthening against the US dollar.

Investors are focused on data on inflation in Japan in October. The base consumer price index remained unchanged at 1.0%, while the general CPI rose from 1.2% to 1.4%. According to the Ministry of Home Affairs, the rise in prices was due to an increase in the cost of gasoline, kerosene and other types of fuel. A serious decline in oil prices in November could put pressure on Japanese inflation: consumer price indices may start to decline again, not approached the target level of 2.0%.

Australia

The Australian dollar generally weakens against its main competitors - the yen, the pound, the US dollar, and the euro.

In the absence of significant releases, the movement of the Australian currency is technical. However, it is worth noting the visit to Australia of the Indian President Ram Nath Kovind, who called on Australian businessmen to more actively deal with his country. During the visit, it was decided to sign a trade agreement in the next 12 months in order to increase mutual investments.

Oil

During the day, oil prices had ambiguous dynamics.

The overall pressure on the quotes is provided by the EIA report published yesterday, which recorded a new increase in US oil reserves by 4.851 million barrels. Thus, American oil reserves reached 446.91 million barrels, the highest level since last December. Oil production remained at the same level of 11.7 million barrels per day, while the strategic reserve continues to be sold; over the week, it fell by 0.8 million, to 652.6 million barrels.

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