Analysis

Today, USD strengthens against EUR and moves horizontally against JPY and GBP.

United States of America. Today, USD strengthens against EUR and moves horizontally against JPY and GBP.

The growth of USD is constrained by investors' doubts in the future policy of the US Federal Reserve. Some American experts believe that a two-time increase in rates next year could be harmful and cause an economic recession. The prospect of a partial closure of the government also negatively affects the course. The day before, US President Donald Trump refused to sign a bill on the provisional financing of government structures because it did not provide funds for the construction of a wall on the Mexico border. The new bill, adopted by the House of Representatives, provides for the allocation of $5 billion for the construction of the wall and ensures the work of the government until February 8 of the next year. However, now, its approval by the Senate is required, which members oppose the construction of the wall. In case of failure of the vote, the US government will stop working on Saturday night.

In the evening, it is expected that Q3 US GDP data will be released. It is predicted that the figure will stay at the level of 3.5%.

Eurozone

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

As there is a lack of significant European economic releases, EUR is trading under the influence of American and British news. European investors are watching the situation around the budget of the American government and are preparing for the Christmas holidays. Monday in many European countries will be an abbreviated working day, and Tuesday will be a holiday. Under these conditions, trading activity will be reduced.

United Kingdom

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

British investors are focused on Q3 UK GDP release, which stayed at the level of 1.5% YoY and 0.6% QoQ. Despite the precarious situation with Brexit, the British economy continues to grow, which was boosted by increased sales in the third quarter due to the heat and the World Cup. Nevertheless, the overall picture remains negative, since the volume of investments has been steadily falling throughout the year. In the third quarter, they decreased by another 1.1% due to business uncertainty about the consequences of Brexit.

Japan

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

Today’s Japanese inflation data was poor. In November, the Consumer Price Index fell from 1.4% to 0.8%, and the Core CPI decreased from 1.0% to 0.9%. The main pressure on inflation was caused by the decrease in prices for oil, gasoline, and also on mobile phones. However, the Ministry of the Interior, which provided the data, continues to expect a continued moderate increase in inflation.

Australia

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

As there is a lack of significant Australian economic releases, the currency is trading under the influence of American and European news. It is under pressure from the imminent recession in the US economy, which, along with the US-China trade conflict, may have a negative impact on the Australian economy.

Oil

Today, oil quotes continued to decline.

The long-term negative factors remain the same: the expectation of growth in production and reserves in the United States and investors' doubts that the new reduction in oil production under the OPEC+ contract can balance the market. But now, the fear of a recession in the United States added. A number of experts believe that a two-time rate increase next year, planned by the Fed, may interrupt the growth of the American economy.

In the evening, investors are waiting for the publication of the Baker Hughes report on active oil rigs in the United States. Last week, their number dropped from 877 to 873 units. A further reduction may support oil prices.

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