official Daily Market Analysis From Forexmart.eu

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USD/CAD. November 21, 2019 – Canadian dollar weakened to 5-week lows

The Canadian dollar fell to a 5-week low at mark 1.3330, despite rising inflationary pressure in Canada and the strengthening of Brent position in the oil market to $62.70 per barrel. The current quotation of the USD/CAD pair is 1.3300. Pessimism over US-China trade relations is forcing investors to give up risky assets and raises demand for safe assets and the dollar. Moreover it is putting pressure on commodity goods prices and commodity currencies, such as CAD.

According to current data, consumer prices in October rose 0.3% after falling 0.4% in September. Inflation remained at 1.9% year on year. Today, attention should be paid to the speech by the Governor of the Bank of Canada Stephen Poloz, who may touch on the theme of deterioration of the global economy, which increases the risks of lower interest rates in Canada.

The decision on monetary policy will be made by the Bank of Canada at the next meeting of the regulator, scheduled for December 4. Up to this point, the Canadian dollar may be under pressure in the area of 1.3300. Tomorrow you should pay attention to the release of data on retail sales.
 

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22.11. European markets lost growth after weak PMI

On Friday, European stock markets slowed earlier growth. It was caused by the publication of the weak preliminary business activity index (PMI) in the Eurozone, which didn’t show the visible improvement in the economy of the region, still weighed down by the trade conflict between the US and China.

According to IHS Markit, in October, the composite business activity index in the European Union fell from 50.6 to 50.3, fell short of the expectations for an improvement to 50.9. Data from France and Germany showed that manufacturing PMIs were stronger than expected, but service sector activity slowed sharply.

Christina Lagarde, the new president of the European Central Bank noted, that she was not intended to sharply change the monetary policies of her predecessor, Mario Draghi. And judging by the shares, banks are confident that in the near future easing of monetary policy will not happen.

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EUR/USD. November 25, 2019 – The euro has weakened to the level of 1.10

Last Friday the US dollar got strong support amid published macroeconomic data. This allowed the quotes of the EUR/USD pair to reach closely to the level of 1.1000. According to the data, the index of business activity in industry and in the service sector grew from 51.3 and 50.6 points to 52.2 and 51.6 points, respectively. At the same time, statistics from the EU put pressure on the euro: the PMI composite business activity index in the region fell moderately and remained close to 50.

Additional pressure on the euro was provided by gold sales amid growing interest in risky assets. The reason for improving risk appetite was the information that China plans to increase fines for violations of intellectual property rights, trying to eliminate one of the key topics of the trade conflict between the United States and China. Moreover, the bill in support of protesters in Hong Kong was never signed by US President D. Trump, which significantly reduced the degree of tension between the countries.

So, in the prevailing conditions, the pair will move in a narrow range near the level of 1.10.

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EUR/USD. November 26, 2019 – Euro in a narrow range just above 1.10

Sentiment on global markets remains positive amid further optimistic statements on trade negotiations. It became known that the United States and China continue to take active measures to sign the first part of the deal as soon as possible. In particular, the parties held telephone talks: Deputy Prime Minister He, the US Minister of Finance S. Mnuchin and the sales representative R. Lighthizer reached an agreement on many issues, including the cancellation of part of the tariffs.

Moreover, D. Trump did not sign the bill on the situation in Hong Kong, earlier being approved by both houses of Congress, that confirms the US’s reluctance to escalate the conflict with China.

As a result, the EUR/USD pair strengthened slightly to 1.1015 mark. Nevertheless, the euro is still under pressure – the Ifo data on the business climate in Germany released yesterday confirmed that a quick recovery in the German economy is currently unlikely. During the day, the pair will fluctuate slightly above 1.10.
 

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EUR/USD. November 27, 2019 – Euro continues to weaken

In the absence of significant macroeconomic data, the EUR/USD pair continues to decline slightly to the level of 1.10. The focus of the markets is still the news on the course of trade talks between the US and China. The day before, US President D. Trump reiterated that the sides are very close to signing the first phase of a comprehensive agreement, which had supported the full range of risky assets.

Today, you should pay attention to the release of data on the US economy: the Index of manufacturing activity from the Federal Reserve Bank of Chicago, statistics on orders for durable goods, as well as an updated estimate of GDP for the III quarter.

Recall that Thanksgiving day is celebrated in the USA tomorrow, in connection with which the American sites will be closed, and trading activity at the end of the week may significantly decrease. Today, the EUR/USD pair will be trading nearby the level of 1.10.

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GBP/USD. November 28, 2019 – Pound rises on Brexit positive news

Yesterday, the pound got support and managed to rise to the level of 1.2950. The growth driver was the result of a public opinion poll according to which the Conservative Party, which includes the current British Prime Minister Boris Johnson, can count for a majority of votes in parliament on December elections. As a result, this may increase the likelihood of «soft» Brexit (with a deal) before the deadline set for January 31.

On the other hand, in the debt market we see a decrease in the yield spread of 10-year UK/US government bonds, which signals a possible fall of the British currency.

Today the United States celebrate Thanksgiving day, so the market activity will not be high. During the day, the pair will fluctuate in the range of 1.2900-12950.

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EUR/USD. November 29, 2019 – The pair stabilized at 1.10

The appetite for risky assets remains moderate amid another complication in relations between the US and China. On the eve it became known that D. Trump nethertheless signed a bill supporting protesters in Hong Kong. 

Important macroeconomic news is not expected today, so the pair EUR/USD will continue to fluctuate in the area of 1.1000. Yesterday's inflation data in Germany did not have a visible impact on the euro, despite the fact that the consumer price index was slightly better than expected (1.2% y/y against the expected 1.1% y/y). In the daytime you should pay attention to the release of data on inflation in the European Union.

Yesterday American exchanges were closed due to Thanksgiving celebration, and today the US sites will close earlier than usual, so trading activity in the evening hours is likely to remain low.

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EUR/USD. December 02, 2019 – Euro continues to drift in the area of lows

At the end of last week the euro soared to 1.1025 after Friday falling to 1.0975. The growth was contributed by data on manufacturing activity in China, which turned out to be better than the expectations of market participants. In particular, the Purchasing Managers Index (PMI) in China's manufacturing sector rose from 51.7 in October to 51.8 in November. Analysts had expected a decline to 51.4 points.

At the same time, the growth of risk appetite is limited by reports that China imposed a number of sanctions against some US non-governmental organizations in response to the adoption of a law supporting protesters in Hong Kong. These measures suggest that the controversy between the US and China are not limited only to trade, and it will not be easy to reach a final agreement.

Today you should pay attention to the release of data on the Index of business activity in the States from ISM (18:00 Moscow time). Actual statistics may support the dollar. In anticipation of the data, the EUR/USD pair will continue to fluctuate slightly above the level of 1.10.

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EUR/USD. December 03, 2019 – Euro approached 1.11

Yesterday the EUR/USD pair unexpectedly increased in price, almost touched the level of 1.1100. Such alignment of forces in the pair was facilitated by the US President’s tweet, in which he charged Brazil and Argentina with weakness of their currencies, and introduced tariffs against export from these two countries. In addition, Trump demanded that the Fed must lower the interest rate at the next meeting.

Additional pressure on the dollar was provided by weak macroeconomic data from the United States: the ISM index of economic conditions in the manufacturing sector in November amounted to 48.1%, while analysts had forecast a figure of 49.2%. In addition, construction costs unexpectedly fell by 0.8%, although analysts had expected an increase of 0.4%.

As a result, the US dollar collapsed across the full spectrum of the Forex market, even in relation to risky assets. The additional negative was caused by the US and Chinese altercations around the human rights situation in Hong Kong. 

However, it should be noted, that macroeconomic data from Germany and the eurozone gave support to the euro. Indices of business activity in industry in November showed growth: in Germany - from 43.8 to 44.1 points, in the eurozone - from 46.6 to 46.9 points. Thus, the euro feels quite confident in the current conditions. During the day the pair will continue to attempt to reach the level of 1.11.

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GBP/USD. December 04, 2019 – British pound updated 7-month high

The British sterling is currently the strongest currency on the market. Paired with the US dollar, the pound managed to rise to the area of 1.3060 (which became a 7-month high), although a week ago, it was trading near the area of 1.28. The current quotation of the pair GBP/USD is 1.3045. 

The currency is getting support provided by several factors. The first is optimism around Brexit. On December 12 in the UK there will be held early parliamentary elections, which will most likely be won by the ruling party led by Prime Minister Boris Johnson. Johnson promises to withdraw Britain from the European Union by January 31, 2020, and the market believes him.

Secondly, the general weakness of the US dollar on world markets allowed the pound to strengthen in the GBP/USD pair and update the high of early May. 

Under current conditions, British sterling will feel confident and further, until December 12th.

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Brent. December 05, 2019 – Oil rose to $63.50 per barrel

Oil prices began to rise after yesterday's industry report from the US Department of Energy. The Department reported a drawdown on crude oil inventories in the United States last week for nearly 5 million barrels per week, which is the most dramatic reduction in oil reserves in the past 12 weeks. As a result, Brent rose in price to $63.50 per barrel.

Today starts a two-day meeting of the OPEC+ monitoring committee in Vienna. Analysts expect participating countries to extend the current deal until June 2020 and not to change the parameters of this deal. It also supports oil prices.

Also today attention should be paid to Saudi Arabia, where Saudi Aramco, the country's national oil company, will announce its IPO offering price. It is noted that the demand for stocks is increased, which means that the company can place actions on the upper price limit.

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EUR/USD. December 06, 2019 – The dollar grows amid strong labor market data

Today the euro began to decline, failing to gain a foothold above the level of 1.11. The currency was pressured by weak data from the eurozone: retail sales in the region in November turned out to be worse than expected – annual indicator grew by only 1.4% against the forecast of 2.7%. German manufacturing orders fell 5.5%, while industrial production decreased 1.7%. Analysts expected a 0.1% increase. As a result, the pair fell to around 1.1065.

The news context on trade talks remains mixed. On the one hand, the United States notes the success of the ongoing negotiations, and on the other, the markets again received information about the disagreements of the sides regarding China's purchase of agricultural products from the United States.

Today's US labor market data supported the dollar: the number of people employed in the non-agricultural sector of the country grew by 266 thousand, while analysts predicted an increase only of 180 thousand. As a result, the EUR/USD pair will continue to decline throughout the day.

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EUR/USD. December 10, 2019 – Euro started to grow after the release of data from ZEW

The euro continues to strengthen to the area of 1,11, while market participants are waiting for significant events of this week, concentrated in its second half (Fed and ECB meetings, parliamentary elections in the UK).

News from the front of trade negotiations has recently remained positive. Market players expect that amid the upcoming US elections, Donald Trump is unlikely eager to escalate the trade war and disappoint market participants. Therefore, new import duties on Chinese goods most likely will not be introduced on December 15.

Today, you should pay attention to the publication of the index of economic expectations from ZEW in Germany. Fresh statistics provided visible support to the European currency, since the indicator value has peaked since February 2018. The index of expectations of investors and analysts regarding the German economy in December jumped to 10.7 points from minus 2.1 points in November. Thus, during the day the pair will continue to grow to the area of 1.11.

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EUR/USD. December 11, 2019 – Dollar rises in anticipation of Fed meeting

The euro failed to overcome the 1.1100 level and rolled back to 1.1075. Yesterday, the currency was strongly supported by data on economic expectations from ZEW in Germany. The index of expectations of investors and analysts regarding the German economy in December unexpectedly rose to 10.7 points from -2.1 points in November. The indicator value updated the maximum of February 2018. Experts predicted the growth rate to only 0.3 points.

Today the focus of attention of the market will tend to the meeting of the US Federal Reserve and a press conference by D. Powell. Experts expect the US regulator to leave the key rate unchanged, as well as determine the future course of monetary policy. This can provide strong support for the dollar in the evening. As a result, the pair will continue to decline throughout the day.
 

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GBP/USD. December 12, 2019 – Sterling may rise following the parliamentary elections

Today all market participants are focused on the long-awaited elections to the British Parliament. Voting results are expected not only in the UK, but around the world, as everyone wants to finally find out how the Brexit story ends. Sociological polls have shown that most likely the Tories will win, led by British Prime Minister Boris Johnson.

If the expectations come true, and the Conservatives get the majority of votes, Johnson will be able to complete the British exit from the EU until January 31, 2020. The first results of the vote will be released tonight, and they will be crucial for the further dynamics of the pound.

Today, the British sterling remains at high levels just below 1.3200. In general, since the British decided to withdraw from the European Union, the currency has come a long way: after the Brexit vote the pound collapsed to 1.1450 from the level of 1.5. If the Conservative Party win, the sterling will continue to rise to an area above 1.32.
 

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GBP/USD. December 16, 2019 – Sterling still strong nearby 1.34

The British sterling continues to demonstrate «bullish» sentiment on Monday, trading at 1.3365. At the end of last week, the pound updated its maximum since April 2018, reaching the mark 1.35. The currency got strong support after the announcement of the results of the parliamentary elections in the UK. As it was expected, the Conservative Party, led by Boris Johnson, won by gaining 368 seats in the Parliament of 650. This result was the best since Margaret Thatcher’s elections.

The growth of the British currency, observed after Tories’ victory, was the result of the completion of a three-year period of political uncertainty in the country. In the near future, the European Commission plans to receive details from the UK under the terms of Brexit.

Today the sterling shows some correctional decline, responding to weak data on business activity for December. PMI manufacturing activity index fell to 47.4 from 48.9 points. However, under the above circumstances, the British currency will continue to remain strong at 1.3400.
 

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GBP/USD. December 17, 2019 – Sterling continues to keep downside

The British currency continues to decline on Tuesday, reaching a support level of 1.3200. Earlier, after the victory of the conservatives in the parliamentary elections in the UK, the sterling managed to update the maximum of May 2018 at the mark 1.35, but quickly lost all positions.

Pressure on the British currency is exerted by weak macroeconomic data. In particular, yesterday's data on business activity showed the sharpest decline since July 2016. The Purchasing Managers Index (PMI) fell from the November level of 49.3 to 48.5 points in December, which became a minimum of 41 months. The service sector PMI in December fell from 49.3 to 49 points, having reached its lowest level in nine months. UK manufacturing PMI fell from 48.9 to 47.4 points, which also became the lowest indicator in four months.

Today you should pay attention to the release of data on the British labor market and the speech of the Bank of England head Mark Carney. The weakness of statistical reports may push the regulator to soften monetary policy, that will put further pressure on the sterling.

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EUR/USD. December 18, 2019 – Euro shows weakness

Today the euro keeps showing decrease paired with the dollar, having reached the mark 1.1125. The currency is under pressure of investors' concerns about the situation with Brexit. Earlier British Prime Minister Boris Johnson said, that he intended to introduce the law about country's obligation to leave the European Union in 2020 without the possibility of extending the transition period. This fact again cast doubt on the likelihood of leaving the EU with a deal.

Along with it the US dollar is supported by optimism around trade negotiations between the US and China and by strong macroeconomic data from the United States. Industrial production in November increased by 1.1% against forecasts of an increase of 0.8% and after a decline of 0.9% a month earlier. The number of building permits in November also exceeded forecasts.

Today you should pay attention to Ifo business optimism index for December and Eurozone inflation data for November.

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Brent/USD. December 19, 2019 – Oil stabilized above $66 after data from the US Department of Energy

Oil continues to hold in the area of local highs above the level of $66 per barrel. Brent was supported by yesterday's report from the US Department of Energy. The statistics reflected a decrease in oil reserves by 1 million barrels, while similar data from API a day earlier showed an increase in stocks by 5 million barrels.

The appetite for risky assets remains moderate, as no news has been received from the front of the trade war last days. So, during the day we expect calm trading in the area above $62 per barrel.