Dollar awaits OPEC decision+ to continue growth
In anticipation of the important statistics on the US labor market, the dollar feels insecure and is traded rather neutral. Market participants hope that the release does not confirm recent concerns over the us economy and will reflect decent growth in employment and wages. If so, USD will attract demand, but hardly a potential rally would be prolonged.
However, there is another factor that is able to support the sluggish attempts of growth of the dollar in the short term. Focus markets – negotiation of OPEC+, which will be completed today. Apparently, exporters agree on production cuts. This is almost no doubt. But the main question is, how much will cut production in the final version of the transaction, as well as how long the act will be restrictive measures.
At the moment we know that the group is discussing the decline in the aggregate to 1 million barrels per day: 650 thousand barrels birches themselves of OPEC and its allies for common efforts to reduce the sentence on 350 thousand barrels. Iran, Venezuela and Libya, is likely to receive permission not to participate in the arrangements.
This is not the scenario, which investors expect. The market needs a decrease of 1 million barrels only from the cartel, as well as more decisive measures on the part of Russia. In aggregate, players relied on declining supplies in the area of 1.4 million barrels per day.
So if nothing changes before the end of the day the price of oil can show a strong negative reaction to the OPEC verdict+ that will simultaneously increase the demand for the dollar. In the broader context of the future of the American currency still depends on the rhetoric of the fed and the dynamics of the yield of treasuries.
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