Analysis

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

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

US investors are focused on the upcoming meeting of US President Donald Trump and Chinese President Xi Jinping at the G20 summit in Buenos Aires on November 30. Despite the recent encouraging comments from Trump, who said that China wants to make a deal, and Deputy Minister of Commerce of the People's Republic of China Wang Shouwen, who noted that American and Chinese sales representatives are in close contact, the chances of concluding any serious deal are poor. As the US Secretary of Commerce Wilbur Ross stated recently, the parties could only come to a framework agreement that served as a starting point for further negotiations.

Eurozone

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

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EUR is supported by positive news on Brexit and the Italian budget. At the last EU summit on Sunday, the text of the agreement on leaving the UK from EU was approved, despite the objections of Spain that appeared at the last moment. On the eve of the summit, Spanish Prime Minister Pedro Sanchez said that the EU and the United Kingdom agreed with the Spanish demands, and now the issue of Gibraltar will be discussed between Spain and the United Kingdom during separate negotiations. The market welcomed the approval of the text of the deal by the EU members, still, the threat of its failure in the British Parliament maintains. Also, EUR was supported by the comments of Deputy Prime Minister Matteo Salvini. He noted that the Italian government does not insist on the size of the public debt of 2.4%: if the budget provides for the growth of the country's economy, then the debt may be either 2.2% or 2.6%. Italian ministers are currently discussing possible budget changes to present them in new negotiations with the EU leadership.

During the day, the market is waiting for the speech of the ECB President Mario Draghi in ECON. The statements of officials of such a high rank traditionally attract the attention of investors, as they may contain hints on the next steps of the regulator in the field of monetary policy.

Great Britain

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

The endorsement of the text of the Brexit agreement by the EU members at the last summit reassured the market but did not remove all the problems. Now the approval of the treaty by the British Parliament is necessary, where a serious opposition to the decisions of Theresa May present even among the members of the Conservative Party. Achieving the support of the British Parliament will not be an easy task, which is also understood by the government. Thus, the new Brexit secretary Stephen Barclay noted that the support for the current deal in the House of Commons is insufficient. In his opinion, it is necessary to convince the deputies that withdrawing from the EU without a deal is not in the interests of voters. At the moment, the Theresa May Conservative Party controls 315 seats in the House of Commons out of 650, so it does not have a majority. In addition, the Democratic Unionist Party of Northern Ireland (DUP), which was in a coalition with the Conservatives earlier, is going to oppose the deal. Voting on the transaction should take place in the first half of December.

Japan

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

JPY is under pressure of poor preliminary Manufacturing PMI data in Japan. In November, instead of the expected growth, the indicator fell again from 52.9 to 51.8 points, which is the worst figure in the last four months.

Australia

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

Australian investors are focused on the presentation of the head of the Reserve Bank of Australia, Philip Low, on the cashless payment system. Low expressed his dissatisfaction with several system failures that have recently occurred in the payment systems of national banks. He noted that such issues can negatively affect companies and individuals, and therefore all participants in the process (banks and telecommunications operators) should make every effort to ensure that there were no problems with money transactions.

Oil

During the day, oil prices are rising.

Strengthening the instrument is largely technical in nature since the external background remains negative. US stocks continue to grow; sanctions against Iran are actually postponed, while Saudi Arabia continues to increase production under pressure from the US administration. According to media reports, in November, the country produced oil at a record pace of 11.1–11.3 million barrels per day, while the market expected the beginning of a gradual reduction in production by Saudi Arabia.

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