November 25, 2021
GBP/USD: The Great Britain pound fell and hit a fresh 11-month low against the US dollar on Wednesday. The UK Monetary Policy Committee members are not saying exactly if the Bank of England would raise rates in December or February when the central bank updates its economic forecasts. The US Initial Jobless Claims for the week ending November 20 were better than market expectations, at their lowest since 1969. Moreover, Durable Good Orders in October dropped 0.5% while market analysts had expected growth. However, orders excluding transportation rose more than estimates. As for the Federal Reserve’s favorite inflation gauge, the Personal Consumption Expenditure Price Index rose 4.1% in October, in line with the median market expectations. The local resistance level can be seen at 1,3355. If the pair reaches this level and rebounds from it, it can trigger a further decline towards 1.3280.
USD/CAD: The US dollar was mostly flat yesterday ahead of the US Thanksgiving holiday. A risk-off market sentiment stimulated demand for the greenback because it keeps posting new year-to-date highs against most G8 currencies. On Wednesday, the Federal Reserve revealed the last FOMC meeting minutes, which showed that some participants would like to adjust the Quantitative Easing’s taper pace and raise rates sooner than anticipated if inflation runs hot. The pair can correct to the 1.2625 level due to the local US holidays, but after that, the price will probably continue its upward movement towards 1.2700.
BRENT: Oil prices were stable on Wednesday because the US President’s attempt to coordinate a crude release from major importers around the world has had a limited impact on oil prices. OPEC+ members have not even engaged with Biden’s strategy because they saw it as flawed from the start. The release of 50 million barrels of crude from the US SPR was unlikely going to significantly impact oil prices. Biden’s plan first got support from other countries, such as Japan, South Korea, and the United Kingdom. However, to really push the market down after such a long growth, a clear and potentially price-threatening oversupply would have to be on the horizon. At present, there is no such threat, with OPEC reporting a potential but small oversupply in 2022. It remains unclear what OPEC’s reaction to US strategy will be. It is possible that Saudi Arabian, United Arab Emirates, and Russian will decide not to increase production volumes.