Oil rose almost 6% last night extending to 45.98 as OPEC secretary general Barkindo begins trips to Iran, Venezuela, and Ecuador, in the lead up to the official OPEC meeting on the 30th November, as Russia and Saudi Arabia scheduled informal talks in Doha. From yesterday’s low of 42.20 it climbed to challenge the key resistance of 46.00 which if broken may act as a significant support. Private oil inventories show larger than expected inventory builds. The rise in oil helped CAD outperform fighting back against the USD to test the 1.3575 trading range as it looks to test the 200hourMA at 1.3442. Gold rose by $7 in its largest rise since the US election.
RBA Governor Lowe spoke with an upbeat tone describing the Australian economy as positive whilst confident inflation will come with time. He urged Australian households to build further financial resilience against the growing global uncertainties and upcoming political events. After AUD/USD bounced from 0.7506 support a pullback in base metals and continued vulnerability has seen Aussie retreat to the downside as Tokyo steers toward 0.7540. AUD/JPY has built momentum at is looks to text 84.00 as it approaches a new high. The surge in US short term yields has hurt the JPY whilst the RBA on hold has supported Aussie whilst helping it on crosses.
GBP was hit by a poor CPI registering 0.9% versus forecast 1.1% potentially signalling effects of Brexit creeping into the economy. This caused the GBP/USD to slip towards the 20DMA at 1.2343 as fixed income treasuries and gilts began to widen. Despite Carney being positive on inflation poor current numbers is priced in by the markets.
