China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Is the EUR able to continue the rise?
2019-11-11 • Updated
At the end of May, the EUR/USD pair plunged to lows of July 2017. However, the single currency managed to return its positions. EUR/USD is rising but there are doubts on the future strengthening of the euro. And there are several reasons for that. On the one hand, unclear Italian policy and the Brexit deal weight on the euro making it plunge. On the other hand, the European Central Bank is anticipated to taper its quantitative easing program. The ECB is going to debate whether to gradually unwind bond purchases. The Central Bank is anticipated to conclude with a public announcement on when they intend to cease asset purchases on June 14.
Let’s have a look at forecasts of the world leading financial banks and institutions.
UOB bank has changed its forecast on the EUR from a bearish to neutral. In the near-term, there are hints on some advance, however, it’s viewed as a part of a 1.1600-1.1830 consolidation range and not the start of a sustained move up.
Analysts at Scotiabank stay neutral/bullish in the near-term. According to the analysts, the near-term balance of risk appears to support the euro strength. As a result, in the near-term, the EUR is anticipated to gain the early May closing high around 1.1850. The support is anticipated to lie at 1.1720. In the medium-term, the analysts are concerned about implications of the crossing of the 50-day MA (1.2018) below the 200-day (1.2012), the “death cross”. So the fall may be anticipated.
The Danske Bank sees EUR/USD below 1.20 for longer. Before the bank saw the pair below 1.28 in the long-term, however, up to now, it predicts that EUR/USD will be stuck below 1.20 for an extended period. In the near-term, the bank expects the downward movement of the pair.
According to the SEB Research, EUR/USD will trade at 1.10 over a three-month horizon. The company thinks that continued Fed tightening this year and next will support the US dollar’s rise in coming quarters. As a result, a fact that the US interest rate will be higher and the European interest rate will remain unchanged will lead to a further support of the USD in the near-term. However, the SEB Research says that once the ECB and other central banks start to normalize policy, these forces together with USD negative rebalancing flows will exert renewed downward pressure on the US dollar.
Making a conclusion, we can say that the forecast for euro movement in the near-term is positive. However, in the medium-term, the euro may meet difficulties and fall to the May lows again.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.