NZD/USD Surges, GBP/USD Muted, Crude Oil Spikes - US Market Open

2019-12-02 14:02:00

MARKET DEVELOPMENT – NZD/USD Surges, GBP/USD Muted, Crude Oil Spikes

DailyFX 2019 FX Trading Forecasts

GBP: As weekend polls show that the election race is beginning to tighten between the Conservatives (+0.2) and Labour party (+2.1), upside in GBP/USD remains relatively muted. The pair had briefly broken below 1.29 before finding modest support from better than expected manufacturing PMI data. That said with just over a week to go until the election, GBP/USD is likely to trade below 1.3000.

Source: Britain Elects poll tracker

NZD: The Kiwi is flying high to begin the week with the currency gaining circa 0.9% following the improved risk tone stemming from better than expected global manfacturing PMI data. Alongside this, the NZ Finance Minister stated over the weekend that the government plans to unveil a fresh fiscal stimulus package on infrastructure, in which details are to be announced at the budget policy statement on December 11th. In turn, this has seen AUD/NZD back below 1.05 for the first time since August, while NZD/USD also eyes a move towards 0.65.

Oil: Throughout the week, oil markets will remain focused on the OPEC meeting, which is scheduled for Thursday, while non-OPEC ministers (Russia) will meet on Friday. As it stands, the consensus is for OPEC to stick with its current production quotas of 1.2mbpd. However, recent source reports have hinted that Saudi Arabia are looking to deepen oil cuts by another 400kbpd and to last until at least June 2020, given that OPEC’s analysis expect a significant oil and inventory build in the first half of 2020. Consequently, in reaction to the source reports, oil prices are notably firmer, gaining as much as 2%.