Oil Price Weakens and Dollar Gives Ground
Binary.com Daily Financial Review August 3rd 2016
- This morning, as the oil price weakens with oil set to test $40, the dollar index is unchanged after yesterday’s of heavy selling.
- There is now a lot riding on Friday’s Non-Farm Payrolls and the Bank of England’s decision on whether to fuel Brexit-based panic by unnecessarily tampering with interest rates.
- (As an aside, in the ’90s the UK’s monetary policy was made up of what came to be known as ‘the six wise men’. After the usual time delay the minutes of a meeting were released which showed that three of these gurus had voted for a rate cut, three for a rate rise. The Milton Friedman/Gordon Pepper monetary base, i.e. M0, is what should be regulated but the problem there is that politicians can not then use monetary policy as an election tool.)
- The yen picked up a lot of this dollar weakness, with the USD/JPY and other dollar pairs slipping lower.
- The dollar pairs performed well yesterday and are holding yesterday’s gains with the exception of the Australian and New Zealand dollars.
Coming up today:
- Coming up today, we have UK services PMI at 09.30.
- This is followed by ADP non-farm employment change at 13.15.
- Then we get ISM Non-Manufacturing PMI at 15.00……
- …….and crude oil inventories at 15.30.
- The AUD/JPY has underperformed other yen pairs of late as the Aussie’s reliance on China weighs heavily. With the yen in extreme demand and China’s economy easing, we could see further downside on the AUD/JPY.
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