German economy close to recession – Forex
Euro-dollar exchange rate
The exchange rate of the single currency changed the indicator of 1.1000, falling to 1.0955. Analysts say that there is little probability of strengthening in the near future, the rise of quotations is not expected.
German industry increased production to 0.3%, and if we count the level of all 2019, the fall is 4%. The current level is improving compared to the August and September data, but it is the lowest figure in nine years. The EU economy is strong depends on the performance of Germany, and the situation with the decline of industry there does not cause positive emotions. The Central Bank of Europe wants to strengthen the manufacturing sector with cheap funds, but the downward trend is not going away.
The German Trade Federation has reduced its forecasts for deliveries for this year due to the unresolved situation on Britain's exit from the EU, as well as with new American duties on imports of European goods. The new forecast indicates that this year will give a rise in German exports by half a percent, at a time when earlier the figure was one and a half percent. Pressure from the U.S. market weakens the German economy, and the incomprehensible situation with Brexit leaves all players in limbo.
The euro-dollar quotations continue to fall. Analysts forecast a drop to 1.0890.
Our forecast for the euro to the dollar: the decline to the indicators 1.0940, 1.0920, 1.0900.
Pound-to-dollar exchange rate
The quotes of the British currency against the dollar fell from the index of 1.2300 to a lower 1.2210. The course was influenced by telephone talks between Johnson's cabinet and German Chancellor Merkel. During the conversation it became clear that the situation with the exit from the EU has every chance to fail. Some observers say that the German Chancellor reacted negatively to the proposal to create a duty-free zone on the Irish territory, thus creating the opinion that it would not be possible to reach a common agreement between the representatives of the parties. The Prime Minister, for his part, is adamant that Northern Ireland should leave the customs union. Boris Johnson also stressed that the representatives of the European Union are not ready for a compromise.
The Institute for Fiscal Studies said the UK economy had fallen by 2.5 to 3 per cent since Brexit, and had also slashed the treasury by 60 billion pounds. If the exit from the EU ends without a single solution, Britain's debt could rise to its highest level in half a century, reaching double the level of 100 billion pounds.
Analysts are confident in the Kingdom's request for a new Brexit date, as well as the negative impact on the British currency of early elections, which will be held this year. Political analysts predict the victory of the Conservative forces, and this will provoke a negative outcome of Brexit. Due to this, the pound will fall to 1.2000.
Our forecast for pound-to-dollar: fall to 1.2200, 1.2170, 1.2150.
The price of gold
The price of gold has strengthened to $1,500 an ounce due to the increasing tensions around Britain's exit from the EU. The Chinese Foreign Ministry is ready to launch retaliatory actions against the United States if they impose sanctions.
The China Hard Currency Commission issued a statement saying that Chinese gold and currency stocks have risen since late last year. Now the reserves are 62.6 million ounces, which is higher by 7% than in 2018. Central banks have raised demand for gold, and this has contributed to the price growth. Analysts predict this trend for the next two years, and this will undoubtedly strengthen the quotes.
Data from the Federal Reserve on new rate falls are expected. Due to the weak performance of the economy, there are expectations of a two-stage rate cut in 2019. This will help to consolidate the economy and will save from further decline. With more encouraging prospects from the FOMC, the price of gold will rise to $1,530 per ounce.
A meeting with representatives of China and the United States is also expected this week. Analysts do not hope that the parties will come to an agreement: the trade situation remains tense.
Our forecast for the price of gold: rise to 1502, 1505, 1507 dollars per ounce.
Oil price
The price of oil fell to $52.30 per barrel. U.S. energy companies expect production to increase by 20,000 barrels, reaching a daily level of 12.26 million barrels. Representatives of the Ministry of Energy talk about an increase in raw materials at the end of the year, before the resumption of production in the Gulf of Mexico. Next year promises to restore production due to the fall in the price of oil for the first quarter. The United States energy sector lowered its forecasts for the average WTI oil price as well as Brent for this year and next.
This week, the volatility of the oil market fell as traders expect the outcome of the meeting between China and the United States by the end of the week. The results of the negotiations will affect the price policy and further interests of market participants to oil. Low price indicators suggest that investors do not believe in the imminent end of the conflict in the market. To increase interests, it is necessary to reach a compromise between the countries of America and China, although it seems unlikely in the near future.
OPEC oil production fell to 28.45 million barrels per day last month, a decline of 1.48 million barrels from two months ago. This unexpected decline has not occurred since 2002, and was due to attacks on Oil Facilities by the Saudis. Prices have not strengthened yet, as there is a great risk of decline in demand for raw materials, which rather scares bidders than the political situation on the world stage.
Our forecast for WTI oil: falling to 52.00, 51.75, 51.50 dollars per barrel.
Cryptocurrency
The cryptocurrency market on Tuesday slightly decreased in price. Bitcoin fell to $8,200, Ethereum went down to $180. XRP rebounded to 27.75 cents. The total capital of the cryptocurrency reached the figures of 221 billion dollars.
EOS has revealed an updated system security project that will help increase security as well as increase the scale. The new version will help introduce a number of WebAssembly-based devices that will help increase network capabilities. Representatives of EOS say that the project can be called the first among blockchain systems that have implemented tools in order to strengthen the principles of security. In connection with the news, the price policy of EOS has fixed to a high resistance rate of 3 dollars.
A new decision is expected from the U.S. regulator of exchanges and securities regarding Bitwise's statement on the introduction of a new currency Bitcoin-ETF. Developers are positive and expect the consent of the regulator, as the cryptocurrency market has recently shown itself as a strong environment. But there are a number of analysts who are still unsure of the positive outcome of the Bitwise decision. Recall that before that the commission twice postponed the decision, because it is still not sure about the reliability of the digital currency.
Our forecast for cryptocurrency: raising Bitcoin to 8250, 8300, 8400 dollars. Ethereum will rise to $182, $185, $190. XRP will rise to 28.00, 28.50, 29.00 cents.
News
Australia's Westpac will publish the consumer confidence index.
Europeans are preparing for a council to discuss Britain's exit from the EU. The British, in turn, will prepare data on the decisions of the Committee of Financial Policy.
JOLTS USA will publish information on new vacancies. The Federal Reserve will present to the public the results of the negotiations of the Open Market Regulator last month. The U.S. Energy Data Agency will publish information on oil reserves.
