US Dollar Muted, OPEC Set to Extend Oil Cuts, Gold Prices Tests $1400 - US Market Open
MARKET DEVELOPMENT – USD Muted, US-China Trade Truce Likely, OPEC to Rollover Production Cuts
USD: Relative calm across FX markets with major G10 pairs trading in subdued fashion ahead of the G20 summit. Majority of the focus at the upcoming summit will lie on the outcome of President Trump and Xi’s trade discussion, in which a trade truce/ceasefire with a resumption of talks continues to be the base case scenario. However, questions have been raised as to whether this scenario could be reached after the WSJ reported that Chinese demands for a trade deal, included lifting Huawei ban and all punitive tariffs on China.
EUR: 200DMA support (1.1344) continues to underpin the Euro, however, 1.14 remains the stumbling block for the currency. German inflation figures surprised to the upside with the headline figure rising 1.6% vs. Exp. 1.4% (full analysis), however, price action remains tentative nonetheless.
Crude Oil / Gold: OPEC look set to rollover oil production cuts for the remainder of 2019 with both Iraq and Kuwait showing their support for the deal. However, eyes will be whether OPEC support ideas of deepening production cuts, which could provide a floor for oil prices in the near term. Elsewhere, gold prices have extended its pullback from the 6yr peak with the precious metal testing support at $1400.
Source: DailyFX, Thomson Reuters
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--- Written by Justin McQueen, Market Analyst
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