Analysis

Today, the European currency is weakening against its main competitors - the pound, the US dollar, and the yen

United States of America, The US currency today is strengthening against the pound and the euro but is weakening against the Japanese yen.

In the morning, the dollar was pressured by yesterday’s speech of Fed Chairman Jerome Powell and preliminary data on US GDP for Q3 2018. In New York, Powell noted that now the interest rate is “just below” the neutral level, while in early October, he pointed out that there is much to raise. Powell's statement was interpreted by the market as the regulator’s readiness for a pause in rate increases. In addition, GDP data pressured the US currency. According to preliminary data, in Q3, the figure could reach 3.5%, which is significantly less than in Q2 (4.2%).

In the evening, investors are waiting for the publication of the FOMC minutes. If there are new hints of slowing interest rates, then the dollar may be subject to significant pressure.

Eurozone

Today, the European currency is weakening against its main competitors - the pound, the US dollar, and the yen.

The euro is under pressure due to searches in the six offices of Deutsche Bank in Frankfurt. About 170 policemen are looking for evidence against bank employees. According to investigators, they could help clients in creating offshore enterprises and money laundering. Published today, data on the German labor market turned out to be positive; however, it could not significantly support the single currency. The unemployment rate in November fell from 5.1% to 5.0%, while the number of unemployed fell more than expected by 12K.

On Wednesday, inflation data for the Eurozone is expected to be published. According to forecasts, in November, the base consumer price index will remain at 1.1%, and the general CPI may decline to 2.0%.

United Kingdom

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

Investors are still focused on Brexit. Currently, the heads of several leading national banks have joined the campaign for the adoption of an agreement with the EU. Thus, Mark Carney, the head of the Bank of England, in an interview with the BBC noted that most of the British enterprises do not have a plan of action in case of a tough Brexit, so the country needs a transition period. The day before, the regulator warned that a “divorce without a deal” could result in a decrease in the British economy by 8% in the first months after the country's withdrawal from the EU. This opinion is shared by the head of the Bank of Ireland, Philip Lane. He noted that uncertainty scares investors who stop investing in the British economy. The adoption of the deal will return confidence to business.

Japan

The yen is strengthening today against its main competitors - the euro, the pound, and the US dollar.

The currency is supported by the growth of retail sales in Japan. In October, the figure rose from 2.2% to 3.5% (the most significant growth since December last year). Consumers increased purchases of fuel, cars, drugs, and cosmetics. The increase in retail sales encourages investors because it is pushing GDP growth. The Japanese economy is expected to resume growth after a 1.2% decline in Q3.

Australia

AUD today is generally strengthening to the main competitors - the US dollar, the euro, and the pound.

Australian currency is growing, despite the negative data on sales of new houses. In October, the figure declined by 0.8%. Generally, the decline in the Australian real estate market continues.

Oil

During the day, oil prices had ambiguous dynamics: the morning decline was replaced by growth and recovery of positions.

Generally, the market is pressured by the EIA report on oil reserves in the United States, according to which they increased again by 3.577 million barrels to about 450 million barrels. At the same time, gasoline stocks declined by 0.7664 million, and stocks of distillates grew by 2.610 million barrels. The figure has been increasing for 10 consecutive weeks. On the other hand, prices are supported by investors' hopes for OPEC to decide on production reduction at the next meeting.

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