Analysis

Forex. USD today is strengthening against GBP and EUR but is weakening against JPY.

United States of America, USD today is strengthening against GBP and EUR but is weakening against JPY.

American investors are focused on preparations for the meeting of President Donald Trump and Chinese President Xi Jinping at the G20 summit in Argentina. During the month, investors have been receiving a lot of ambiguous information about this. Yesterday, Trump encouraged investors again, saying that China wants to make a deal and we’re very happy with that. Deputy Minister of Commerce of China Wang Shouwen noted that Chinese and U.S. trade teams had been in close touch. At the moment, the market is set to a positive outcome of the negotiations.

Eurozone

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

EUR declines under the influence of negative statistics. The Q3 German economy has slowed down for the first time since 2015, the GDP indicator was –0.2%. The economy is under pressure of a reduction in German imports, which lasted from July to September. Preliminary November German and EU PMI also were negative. German Service PMI fell from 54.7 to 53.3 points, EU Service PMI decreased from 53.7 to 53.1 points. German Manufacturing PMI fell from 52.2 to 51.6 points, and EU one dropped from 52.0 to 51.5 points. Thus, the activity indices approach the mid-point level of 50.0 points closely, below which the reduction of sectors begins.

Great Britain

GBP is strengthening against EUR but weakening against USD and JPY.

GBP is under pressure of the uncertainty around Brexit. The EU summit, where the treaty may be approved, will be on Sunday but a number of controversial issues are not resolved. Possibly, Spain will try to block the agreement, demanding separate negotiations on the status of Gibraltar. Yesterday, the Secretary of State of Spain in the EU Luis Marco Aguiriano said that the text of the agreement was changed without the knowledge of the Spanish authorities. The question of Gibraltar can be used by Prime Minister Pedro Sanchez to attract supporters during the December regional elections. In addition, a number of EU countries, including France, fear that they may lose access to the waters of the British Isles and will not be able to fish there. These issued and a number of others may be discussed at the EU meeting on Sunday.

Japan

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

As there is a lack of significant economic releases, the movement of JPY is technical in nature. Investors are still reacting to yesterday's inflation data. The threat of a decline in consumer price indices due to the falling of oil prices may put the Bank of Japan in a difficult position and make approve any measures of monetary policy tightening, although it may affect the Japanese economy negatively in some aspects. Thus, the head of the regulator Haruhiko Kuroda has already noted that low interest rates reduce the profitability of regional Japanese banks, which may threaten the Japanese financial system.

Australia

AUD weakens against USD, EUR, and JPY, and moves horizontally against GBP.

Australian investors are focused on the preparations for the meeting between US President Donald Trump and PRC Chairman Xi Jinping at the G20 summit, hoping for any trade agreements that could mitigate the current trade conflict. In addition, traders are paying attention to the current visit of Indian President Ram Nath Kovind to Australia, during which it was decided to sign a trade agreement to increase mutual investments in the next 12 months. At present, the turnover of India and Australia has reached $27.5 billion. Australia's largest export to India is coal, which last year was worth about $9 billion.

Oil

During the day, oil prices declined.

The instrument is under pressure from the increase in oil reserves in the US, as well as negative data on EU business activity, indicating a possible slowdown in production in leading European economies. In the evening, Baker Hughes US Oil Rig Count data will be released. The last time the indicator increased from 886 to 888 units. The continuation of the trend may affect oil prices negatively.

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