Weak indicators are dragging the dollar down
Euro-dollar exchange rate
The exchange rate of the single currency started to strengthen yesterday, reaching the index of 1.0980. Against the background of low economic performance in both the EU and the United States, the quotations are at a weak level. Since reaching the minimum for the last two years, the rate begins to recover with the mark of 1.1000.
last month showed low data on business activity in the German services sector, and across Europe. Prior to that, low production figures had been published. Because of this, the quotes have not shaken, as the weakening of the economy has been observed for some time and has managed to exert its influence on the currency. Underestimating consumer prices and low retail sales did not cause low prices. What has played a role in strengthening is the fall in American business activity.
UOB Research forecasts the continuation of current quotes in the near future. For the euro to the dollar is expected a side range in the market. Also, analysts do not plan to reduce the single currency, the period of decline is a thing of the past, as evidenced by the current figure of 1.0960.
The situation resembles the initial period of consolidation, leaving behind a limit of 1.0890 – 1.1075. The forecast for the future foresees a gradual fall of the euro, analysts advise to implement the euro against the dollar, following the local maximum indicators.
Our forecast for the euro/dollar pair: strengthening to 1.1000, 1.1020, 1.1050.
Pound-to-dollar exchange rate
The British currency against the dollar rose to 1.2360 against the dollar at the beginning of the week. The recent decline in the business activity of the service sector provoked a drop in the US dollar. As for the pound, the situation is consistently low: as long as there is an unresolved outcome of Brexit, there is little chance of a trend changing.
It became known the decision of the European Union on the ideas of the British prime minister: representatives of the EU do not agree to accept the option, because it is not a suitable outcome of disagreements. Johnson's proposal seems good enough for europeans to close all conflicts over the Irish border and successfully strike a deal. For example, MEPs argue that the British version does not fit the idea of a compromise on backstop.
British business data fell last month to a near-record low of 49.5 this year. The Kingdom's economy is stagnating due to brexit conflicts. For example, September showed a low level of GDP. Analysts say that if the new term for Brexit is received, the economic level will begin to fall rapidly.
Our Friday forecast: the rate fell to 1.2340, 1.2320, 1.2300.
The price of gold
The price of gold rose to $1,508 per ounce yesterday. Low performance of the U.S. economy provoked the strengthening of quotations to the level of 1460 dollars.
The trading situation is improving due to low growth rates and the decline of the stock market. For example, traders stepped towards the SPDR Gold Trust exchange by 0.32%, which is 924 tons.
The fall in the labour market due to job losses, as well as the decline in production efficiency to the lowest level in 10 years, has affected the increased interest in gold.
Analysts expect the latest indicators from the U.S. labor market. If jobs fall in volume, gold prices will strengthen to 1530 dollars per ounce.
It is said that the price of spot gold can increase to the boundaries of 1515 – 1525 dollars per ounce, and then fall to 1500 dollars. This is the extreme low point that is predicted.
Our gold price forecast: strengthening to 1510, 1512, $1515 per troy ounce.
Oil price
Yesterday, oil fell in price to $52.20 per barrel. The fall of the U.S. economy triggered the decline of the entire market to the August low. Macroeconomic world data are falling, and this causes a decline in interest in raw materials and lower prices.
Yesterday's statement of the monetary fund that the fall in the general economic level could lead to a sharp deterioration, caused public fears. That is, if the situation does not start to strengthen, it will lead to a protracted crisis. The WTO has published a forecast for the trade sector for the current year, which indicates its growth of 1.2%, compared to the previous 2.6% six months ago.World recession occurs against the background of low production in the United States, trade recession and sales of the auto market . Residents' confidence plummeted. The International Energy Agency has announced new research on oil demand. Now the forecast figures show the figure of 1.1 million barrels per day.
A sharp rise in raw material production among Americans by 3.1 million barrels played a role in the price decline. The WTI brand has achieved lower rates than those that were before the attack on Saudi Arabia. Brent fell to $60 a barrel. The situation in Arabia is recovering, and the oil market continues to be affected only by negative economic indicators.
Our forecast for WTI oil: strengthening to 52.40, 52.60, 53.00 dollars per barrel.
Cryptocurrency
After a sharp collapse, the cryptocurrency by yesterday again returned to low indicators. Bitcoin fell to $8,180. Ethereum fell to $173, while XRP reached 24.60 cents. The total capital reaches 217 billion dollars.
The owners of Telegram Open Network announce the release of the platform before the end of the month. The platform will work on the basis of Proof-of-Stake, which speaks of higher performance and quality. The developers claim that the system is also supported by the currency Ethereum. Recall that testing began early last month, and the main part is expected by the end of this. Otherwise, TON savers will get their money back.
Swiss exchange SIX announces a new platform, which will consist of Bitcoin at 90% and Ethereum with a share of 10%. The exchange commodity supports physical assets, which means that every element of ETP will be covered by a digital currency. The bank guarantor of the new currency is Bitcoin Suisse Valut. The market has already adopted ETP on the basis of major digital currencies, as well as goods using Ethereum, Bitcoin, XRP.
Our forecast for cryptocurrency: the decline of Bitcoin to the indicators of 8150, 8100, 8000 dollars, the fall of Ethereum to the levels of 170, 168, 165 dollars. XRP will be at 24.40, 24.00, 23.50 cents.
News
The Australian Retail Sales Index will be published.
The U.S. will prepare information on the labor market, as well as the NFP index on new jobs, unemployment rates and average wages. The head of the Boston Federal Reserve, Eric Rosengren, and the chairman of the Federal Reserve Bank, Jerome Powell, are expected to make representations. The publication of the Canadian Ivey index on business activity and export and import indicators, as well as the aggregate balance in the market, is being prepared. American Baker Hughes presents the volume of drilling rigs in production.
