The foreign exchange market is dominated by external factors
This week, the foreign exchange market is expecting several important events at once - for the European segment it will be a meeting of the ECB, and for the dollar and its dependent currencies - a meeting of the Federal Reserve. In parallel, there is pressure from external macroeconomic and geopolitical factors - the ruble is affected by oil, and the dollar is affected by the state of negotiations between the United States and China.
There is no truce between Beijing and Washington yet
Despite the fact that as part of the GXNUMX leaders’ meeting, Trump and the PRC leader held a meeting at which they promised each other to refrain from imposing harsh economic sanctions, the state of affairs between the countries can hardly be called favorable.
Washington is so far reluctant to lift restrictions on Huawei, and China has again expressed opposition to the US support it provides to Taiwan. The Chinese authorities expressed a note of protest over the supply of a new batch of American weapons to the island worth more than $2 billion. Much will depend on the upcoming meeting of American officials in China.
Oil is growing
If at the end of last week oil chose an incomprehensible vector of price movement, then this week the situation has changed several times. The price tag of black gold was alternately influenced by reports of a declining number of drilling rigs in the United States (by 5 over the past week), then by forecasts of declining oil demand by 2020.
Prices were strengthened by recent reports from the American Petroleum Institute, which stated that crude energy reserves in the United States fell again, and significantly - by 11 million barrels. The decline was expected, but within 4,5 million barrels, so the news provided strong support for black gold. The Department of Energy's report on oil reserves will be published on Wednesday.
The situation with Iran does not clarify either. Despite the fact that some experts believe in a diplomatic outcome to the situation, at the moment the conflict can hardly be considered over. All this allows oil to rise in price, adding about 1,5% on Wednesday to the already existing price of just over $64 per barrel.
Meeting of the Federal Reserve and the ECB
The Federal Reserve is expected to cut rates by 25 points, and the ECB by 10 points. The European Bank, by the way, can make the rate negative, which will increase the flow of money into risky assets. The Russian currency may receive support from this.
Dollar exchange rate today shows a slight increase, but the Russian ruble is strengthening against the euro. You can find out more about the state of the foreign exchange market on the InstaForex website.
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