The Global Forex Market
The dollar appreciated 0.63% to 97.45 largely driven by resilient economic data which includes December’s The Institute of Supply Management (ISM) non-manufacturing purchasing managers’ index (PMI) coming in better than expected, accelerating to a four-month high of 55.0 from 53.9 in November (cons: 54.5) supported by higher production and inventories, and rising optimism over a potential trade resolution.
Further to this is stronger-than-expected private ADP employment, adding 202,000 jobs in December from 124,000 in November (cons: 160,000), and initial jobless claims continuing to trend downwards to 214,000 as of Jan 4,2020 from 223,000 in the week prior (cons: 220,000). Besides, the dollar received further impetus following positive trade developments between the US and China, with the latter confirming plans to sign a preliminary deal by early next week. Nevertheless, the concerns over further geopolitical escalation between the US and Iran were short-lived after President Donald Trump said Iran appeared to be “standing down” following Teheran’s attack on the Ain al-Asad airbase. However, he added that the US would immediately impose additional economic sanctions on the Iranian regime.
In the commodities market, the Brent crude price shaved off 4.71% to US$65.37 per barrel of oil owing to the easing fears on the imminent US-Iran tension and a surprising crude build-up by 1.2 million barrels (cons: -3.6 million barrels) for the week ending Jan 3 as reported by the Energy Information Administration.
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