The USD has been strong across the board in recent months, as it has reasserted itself as the world’s reserve currency, with the USD Index up over 7% since the summer. Cable has trended lower since the beginning of July, trading from 1.7190 to print a new 12 month low of 1.5652 today.
Is a 1.50 handle on the cards in the not too distant future, as Carney seems intent of pushing back the markets expectations of an interest rise, and the Federal Reserve looks to tighten monetary policy.
GBPUSD currently trading 1.5683.
EURCHF and the SNB
The Euro / Swiss Franc exchange rate (EURCHF) is edging closer to the floor of 1.20 that the SNB has defended for 3 years. The cross has slowly been grinding lower towards the price (1.2000) that traders know the SNB has declared to defend by buying unlimited amounts of Euro’s. On the 30th of November the Swiss people with vote in the “Save Our Swiss Gold” referendum, which if successful, would have significant implications for the future of how the SNB are able to act. The gold initiative would reduce the flexibility of the bank and limit how it would be able to operate in the future.
But why hasn’t Chairman of the SNB, Thomas Jordan verbally intervened to weaken the Swiss Franc as the pair moves closer to their line in the sand?
Current low of the day is 1.2015.
Brent and WTI Oil
In the commodities market Brent and WTI crude are in a bear market (downturn of 20%). Both Brent and WTI are trading at 4 year lows, with a 30% fall in price since the beginning of June. Some analysts have highlighted the boom in US shale production as a significant factor in the recent price fall, alongside slowing global demand.
Members of OPEC haven’t cut production, which is their usual response to a dramatic fall in prices, and have held production steady. OPEC is set to meet later this month.
The Brent / WTI premium has narrowed dramatically since the record highs seen in Q3 of 2011, now front month spread is $3.93.
Brent Crude Jan: $78.13/barrel
US Crude Dec: $74.20/barrel