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USD makes strong start to the week while Oil slides lower

16:51 11 February 2019

Summary:

  • USD rises across the board as buck make strong start to the week

  • GBPUSD falls below 1.29 as UK growth slows

  • Oil falls back, with divergence growing

  • Stocks little changed in muted session

  • Venezuela starts regulating crypto remittances

 

It’s been a strong start to the week for the buck, with the US dollar rising against all its peers. There’s little news out that fundamentally supports these gains, with it seemingly being more a case of the persistence of recent strength. The greenback is trading higher across the board at the time of writing.

 

The latest signs suggest that UK economy activity is slowing further, with the month on month decline of 0.4% particularly concerning. This is the largest drop since the month on month figures were first released last July, and while it is obviously volatile and short term in nature, it does represent a potential warning sign. The more widely viewed quarterly figures showed a paltry increase of 0.2% and while it would be a little presumptuous to conclude that we are heading for an imminent recession, the pace of growth is clearly slowing and the economy far from firing on all cylinders.  

 

There’s been some selling seen in the energy space today with both Brent (oil on xStation) and WTI (Oil.WTI on xStation) trading in the red. The declines come from a combination of factors with an increase in US drilling activity and a refinery fire in Illinois both having a direct impact on the market, while a persistently strong buck is caused indirect downward pressure on the oil prices. A notable trait in this space in recent trade is the underperformance of WTI, which has consistently been weaker than Brent in recent sessions. At the time of writing for instance, Oil is lower by 1.4% and Oil.WTI by 2.2%.

 

It’s been a mildly positive start to the new week for US indices, with all 4 markets trading higher on the open although these gains have since been pared somewhat. Thursday and Friday’s trade followed a similar pattern for US stocks, with selling ceasing around the European close and a recovery into the end of the Wall Street session. The recovery on Friday saw the US500 end both the day and the week slightly higher, and the move has since gained further support after some positive remarks on the trade front as China return to the markets following their New Years holiday.

 

The beginning of the new trading week on the cryptocurrency market is bringing notable losses in Litecoin, which is trading roughly 4% down at the time of writing. Other digital currencies are also in a retreat, losses in case of Ethereum or Bitcoin are less severe though. Today we would like to focus on two interesting topics. The first one has come from Venezuela while the second from the Philippines. Over the recent months Venezuela has taken efforts to implement its own cryptocurrency into the real economy in order to allow inhabitants to make remittances, payments and so on as its original currency, bolivar, has been affected by gargantuan inflation. Now, the Venezuelan government has announced that it begins regulating cryptocurrency remittances. According to a decree published by the National Superintendency of Crypto Assets and Related Activities (Sunacrip) on Friday “The sender of the remittances referred to in this ruling is obliged to pay a financial commission in favor of Sunacrip up to a maximum amount of 15% calculated on the total of the remittance.”

 

This content has been created by X-Trade Brokers Dom Maklerski S.A. This service is provided by X-Trade Brokers Dom Maklerski S.A. (X-Trade Brokers Brokerage House joint-stock company), with its registered office in Warsaw, at Ogrodowa 58, 00-876 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. X-Trade Brokers Dom Maklerski S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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