Last week’s most notable trends were the bearish crude oil and the bearish Japanese yen. And then, with a blink of an eye the trends have sharply reversed. By Friday evening, it was quite clear that the protests in Egypt will only escalate, and that political turmoil is inevitable.
This had two main affects; one, considering that the Egyptian unrest was triggered by the political turmoil in Tunisia, that the unrest in Egypt will spread to crude-producing parts of the Middle East, and as a result will have a significant impact on oil supplies from the region. As a result oil prices have rallied, and crude oil reached as high as $90.80 a barrel.
Second, this has also boosted the demand for risk-aversion in the market, and as a result spurred demand for safe-have currencies, such as the yen. Since Friday, the yen gained about 100 pips vs. the U.S. dollar, 200 pips vs. the euro and 170 pips vs. the British pound.
As for today, traders are advised to keep following all the developments from the Middle East, as these are likely to have a large impact on the market for the near-future.
Here are today’s leading global economic releases:
13:30 GMT, Canadian Gross Domestic Product (GDP) – The GDP report measures the change in the value of all goods and services produced by the economy over the last month, as opposed to a year before. If the end result will beat analysts’ expectations for a 0.2% growth, the CAD might see a bullish trend against its major currency rivals.
14:45 GMT, U.S. Chicago Purchasing Managers’ Index (PMI) – This is a survey of purchasing managers in Chicago, who are asked to rate their current business conditions. An end result higher than the projected 65.5 mark is likely to support the USD.
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Yan Petters is a top analyst of market trends who specializes in the forex market. Yan has a reputation for composing highly accurate analytical reports, both technical and fundamental. Yan Petters' ground-breaking perspectives on currency trends are highly valued by his colleagues and clients and has been a featured author on a number of influential trading sites. Yan Petters is an author for the ForexYard blog
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