The dollar rose against the offshore RMB in early trading session on Monday, once rose over 100 pips to 7.0870 level. The analysis generally believes that China’s situation of the coronavirus outbreak is relatively under controlled which makes the RMB becoming stronger. However, the global situation is not that good and will still affect the Chinese economy severely.
In the European session, the dollar rebounded, with the Aussie retraced back to 0.64 below. Oil prices fell that the WTI crude futures have broken $22 level, reflecting that the production cut agreement did not help the oil market much. The gold market remains in the high level, with spot gold trading at above $1700 while spot silver trading around $15.4. ZFX analyst Jacob Leung said that there was no big news so far, but if oil prices continue the downtrend, it will definitely hit the investment sentiment and drag the whole market.
On Thursday’s European Session, oil prices further tested the resistance, which the WTI crude futures reached $26.67, the day high so far. The OPEC, Russia and other major oil-producers will meet today to discuss the production cuts agreement. As Russia has indicated that it is ready to lower the production by 1.6 million barrels per day, the market is currently expecting OPEC+ will eventually reach a consensus.
On Wednesday, bad news hit the Euro and the Aussie, together with the return of the risk aversion, the dollar once rebounded to 100.43. During the European session, the US stock index futures were just ranging, reflecting the cautious attitude of investors.
he OPEC+ meeting originally scheduled to be held on Monday was postponed to Thursday, once suppressing the oil prices. Currently, the oil prices tends to be stabilized, which the WTI crude futures is trading around $27 level. Before any news of the production cuts, it is likely that the oil market will consolidate at the current range.
On Monday opening, oil price gapped down and dropped over 10% as there is uncertainty regarding the OPEC + production cuts this week, which hurt the market sentiment. However, US stock index futures were still doing well after President Trump and Vice President Pence said that they see signs that the coronavirus outbreak in US is beginning to level off. Investor sentiment turns better, boosting the Dow futures and the S&P 500 futures both rising more than 3%.
Even if the current rise in oil prices eases some of the demand for safe havens, it is difficult to stop the dollar. In the European session on Friday, before the announcement of Non Farm Payroll, investors were quite worried. A Reuters survey of analysts showed that 100000 jobs lost in March. Dollar Index rose above 100.5 due to the uncertainty.
In the Asian session on Thursday, oil prices rebounded significantly. WTI crude oil future regained the $22 level. US stock futures are rising, which the Dow futures is up more than 400 points, reflecting a better market sentiment.
During the European session on Wednesday, the dollar rose against major currencies, mainly because the market sentiment turned gloomy. Asian stock markets were generally weak, which the Nikkei and HSI closed lower. The major European stock markets are also following the trend, with FTSE, DAX, CAC, all falling by more than 3%.
ZFX analyst Jacob Leung said that even though the financial market sentiment seems to be improving, the volatility is still quite high, causing tensions among investors. The coming data announcement this week would be highly uncertain which may be bullish for the dollar.