Oil rises despite the strengthening Dollar

8 November, 2016

Oil rises despite the strengthening Dollar

The US dollar jumped on Monday, as it came out that the FBI refused to open a criminal case against Hillary Clinton.  The new batch of leaked emails from her personal mailbox strengthened the position of the Democratic Party candidate on the eve of the presidential elections at 8th of November. The FBI said on Sunday that the outcome of a probe has no further grounds for the prosecution of Clinton.

The Dollar index which tracks the performance of the US currency against its peers surged to 97.69 (+0.77%). Safe heavens dropped along with Yen seeing the decline at 1.4 percent to 104.54 Yen and Gold moving by 1.25% to $1.288,25.  Last week USD/JPY was falling to 102.550 on news that Clinton’s leadership of the presidential race was put in danger with the resumed FBI probe.

The European currency fell by 0.7 percent to $1.1060, moving away from the four-week peak at $1.1143, which was reached on Friday. The Dollar also regained lost grounds against the Swiss franc, adding 0.9 percent to $0.9768 after rising to $0.9789.

The Canadian currency also rose, which might have been affected by the victory of a billionaire who promised to renegotiate the terms of the North American Free Trade Agreement (NAFTA).

The Mexican Peso rose sharply, gaining 2% to 18.63 against the Dollar. It is acting as an indicator of Trump’s chances for win according to the markets view, as his trade and immigration proposals are considered to be extremely negative for Mexico.

The Oil prices advanced in the early trading on Monday after a sharp decline the previous week which resulted in the cost of Crude falling to the lowest level since early August. The continued weakness on the fundamental background is causing most the decline. Futures for Brent rose by 1.34% to $46.19 per barrel. Futures for WTI US crude traded near $44.80 per barrel, up 1.61% above the previous close. Overall, the fundamental data shows it has a few catalysts for oil’s growth. Analysts say there are certain troubles that may hinder the achievement of an output freeze pact at the meeting on November 30th between the members of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC countries such as Russia.

Baker Hughes data showed rig count rose to 450 on the week ending November 4, from 441 in the week earlier.


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