US dollar surge halted after it reached 13-year high

By IFCMarkets

US markets closed on Thursday, US dollar down

US stocks were closed on Thursday due to the Thanksgiving Day holiday. US dollar weakened with US dollar index, a measure of a greenback’s value against a basket of six major currencies, falling 0.1% to 101.60 on Friday, having hit on Thursday its more than 13-year high of 102.05. US dollar has been surging since the victory of Donald Trump in US while positive manufacturing PMI and consumer data this week supported the case for the Fed December rate hike. Markets now price in the 100% chances of Fed rate hike on December 14, 2016. At 14:30 CET the advance goods trade balance for November, October wholesale inventories, retail inventories will come out in US. At 15:45 CET the Markit services and composite PMIs will be released in US.

European stocks steady as losses in banking sector offset advance in healthcare and utilities

European stocks were steady on Friday as advance in healthcare and utilities was offset by loss in banking and commodity stocks. Energy sector slipped 0.5% following the 1% decline in oil prices caused by higher supplies in Saudi Arabia and decline in Chinese imports. EURUSD added 0.5% to $1.0605 having touched $1.0518 on Thursday. Pan-European STOXX 600 index added 0.1%. Stocks of global miner Rio Tinto advanced 1.5% on Friday being the top performers in UK’s FTSE 100. Pharmaceutical sector was in demand and AstraZeneca stocks rallied 1.2%. Still, FTSE 100 edged up only by 0.12% because of falling banking stocks. Lloyds slipped 1% being the bigger loser today in UK banking sector. German DAX 30 lost 0.05% while French CAC 40 fell 0.12%. Today at 10:30 CET the preliminary Q3 GDP came out unchanged in UK while data on exports and imports came out negative, business investment and reported sales for Q3 were positive. No more significant data are expected today in Europe.

Asian stocks advanced as Thanksgiving day made US dollar surge come to a halt

Asian stocks were on the rise on Friday as US markets were closed on Thanksgiving holiday on Thursday which froze the surge of US dollar. Japanese Nikkei rose for 7th consecutive day on Friday following Wall Street gains and advance in USDJPY pair which boosted prospects of Japanese corporate earnings. Markets also anticipate the rebound in consumer prices in Japan as weaker yen will raise import costs. Nikkei index edged up 0.3% to 18,381.22 in its record winning streak in a year. The index added 2.3% for a week. Broader Topix advanced 0.3% to 1,464.53 on 11th day of its winning streak. Having touched an 8-month high earlier this day, USDJPY was flat at 113.35 yen up 2.2% for this week. Hong Kong stocks showed their best performance in 1-1/2 months and ended Friday at a 2-week high. The market was partly supported by steady money inflows from Chinese investors via Shanghai-Hong Kong Stock Connect ahead of launching the cross-border link between Hong Kong and Shenzhen. Another positive for emerging markets was Thanksgiving holiday in US when markets were closed and US dollar index stopped surging which prevented capital outflow from emerging markets. Hang Seng index climbed 0.5% to 22,723.23 points. Financials and consumer stocks were leading the growth. Chinese markets were advancing with blue-chip CSI index up 0.4%. Shanghai Composite added 0.1%.

Oil prices retreat ahead of OPEC meeting next week

Oil futures prices slid awaiting OPEC meeting next week for clarity with output freeze deal. WTI oil futures prices retreated 0.7% to $47.64 a barrel but remained 4.3% up this week. Brent crude futures fell 0.9% to $48.58 closing the week 3.7% higher.

Gold continues retreating on firm US dollar

Gold prices fell to the lowest since February as US dollar hit a high since March 2003. Gold slipped 0.4% to $1.179.7 an ounce on Friday having lost 2.5% this week. Since the unexpected US presidential election results gold has tumbled 7.6%.

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Market Analysis provided by IFCMarkets

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