The dollar index which measures the greenback against a basket of major currencies gained 0.4% to a one-week high of 96.94. The index appreciated as the two key components, the euro and the British pound faltered. The growth gap between the United States economy and other economies is supporting the flow to the greenback. Moreover, the high US treasury yields are making the dollar more attractive relative to other currencies. The safe-haven status promoted the dollar during cases of market uncertainty. However, investors are waiting for the G20 summit on Friday and Saturday which could spark risk sentiment in case of successful trade talks between China and the United States.
The euro lost almost 0.6% against the United States dollar following weak economic data. The German manufacturing PMI fell to 51.6, the lowest since January 2016. The German manufacturing data topped in February, and since then it is on the back foot. The economic data continue to prove that the latest developments are affecting the growth in the European Union. However, ahead of today's European trading session, the common currency was able to recover partial losses on the news that the Italian government will meet tonight to discuss lowering the budget deficit to 2.0-2.1%.
The British pound kicked-off the week on a strong note on Brexit deal progress. During the weekend, the European Union leaders approved the Brexit deal with Barnier and Juncker commenting that this is the "best possible" deal that Britain can have. Now, Theresa May should plan for a parliament vote ahead of the next EU council summit that should take place on Dec 13-14. It will be hard for May to gain the approval of the parliament and the pound could encounter sessions of high volatility. The GBPUSD traded at a high of $1.2836, and the GBPJPY rose to a high of 145.47 earlier today.
Metal prices remain caught in a tight trading range awaiting further fundamentals to spark investors' appetite. The gold ounce is trading between a support area of $1218 and a resistance area of $1230. Meanwhile, the silver ounce is holding a consolidation zone of $14.15-$14.55.
Oil prices ended lower for the seventh consecutive week, weighed down by weak fundamentals and struggling financial markets. Both benchmarks traded at their lowest price since October, the West Texas Intermediate crude futures lost 6.4% to $50.37, and the Brent futures dropped 5.4% to $59.14. OPEC and Russia should meet on the 6th of December, and they are expected to agree on cutting production by more than 1 million barrel per day to sustain prices.
Major Economic Events
|9:00||EU||German Ifo Business Climate Index||102.3||102.8|
|14:00||EU||ECB President Draghi Speaks|
|18:30||UK||BoE Gov Carney Speaks|
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