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Sep 8, 2017
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Morning Market Review
2019-08-19 08:27 (GMT+2)

The euro closed last week with a steady decline against the US dollar, retreating to new local lows of August 2. The European currency remains pressured amid the publication of ambiguous macroeconomic statistics from the Eurozone. In addition, investors responded positively to Donald Trump’s recent statements that the US-China trade conflict could still end with the signing of a final agreement. Published on August 16, macroeconomic statistics from the United States was ambiguous. Investors were optimistic about the dynamics in the number of building permits, which reflected an increase of 8.4% MoM in July after a decrease of 5.2% MoM last month. However, the changes in the number of new residential houses in July fell by 4.0% MoM after a decrease of 1.8% MoM last month. The dollar was also pressured by The University of Michigan Consumer Sentiment Index. According to preliminary estimates, the index fell from 98.4 to 92.1 points with a forecast of 97.2 points.


The British pound corrected against the US dollar late last week, updating local highs of August 8th. The pound was supported by technical correction factors, while the situation around Brexit continues to put pressure on GBP. UK citizens may face food and drug shortages during the first few months after the UK leaves the EU without an agreement. Meanwhile, the government of Boris Johnson still does not have any noticeable progress on the issue of concluding an agreement, so there is growing talk about a possible vote of no confidence. On the one hand, this supports the position of the British currency, since there is a real chance to avoid the "tough" Brexit. On the other hand, the growth of political competition threatens with a new crisis, which will be extremely painful for the prospects of the British economy in the face of growing uncertainty in world markets.


The Australian dollar showed uncertain growth against the US one at the end of last week, recovering slightly after a noticeable decline on August 14. The instrument was supported by technical correction factors, as well as by weak macroeconomic statistics from the United States. The University of Michigan Consumer Sentiment Index in August fell from 98.4 to 92.1 points with a forecast of 97.2 points. Today, the instrument continues the previous trend. At the beginning of a new week, there are few interesting macroeconomic statistics on the market, so investors expect Tuesday when the minutes of the last RBA meeting will be published.


The US dollar showed moderate growth against the Japanese yen on August 16, continuing the development of the "bullish" impulse formed the day before. It is curious that the growth of the instrument proceeded against the background of the publication of ambiguous US macroeconomic statistics, which, in particular, indicated a drop in consumer confidence in August. Today, the dollar maintains a weak "bullish" mood. The yen is pressured by weak data on the dynamics of the trade balance. In July, the balance reached a deficit of 249.6 billion Japanese yen, which turned out to be worse than market expectations of 200.0 billion. Japanese exports in July fell by 1.6% YoY after a decline of 6.6% YoY last month. Imports for the same period declined by 1.2% YoY after declining by 5.2% YoY.


Oil prices showed ambiguous dynamics on Friday, interrupting the development of the "bearish" impulse that formed on August 14. Moderate support for quotes was provided by favorable data on the dynamics of retail sales in the USA, as well as rather optimistic comments by Donald Trump regarding the prospects for concluding a trade agreement between the USA and China. Negative forecasts from OPEC, as well as the published report by Baker Hughes, which reflected the growth of active oil platforms in the USA from 764 to 770 units, restrained more confident price increase.
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