Dollar Rises and Oil Drops


The 2 leading trends in the market at the moment are the bullish US Dollar and bearish commodities, especially Crude Oil and Gold. It is very clear that the two trends are highly correlated, thus whenever one of them will show signs of reversing, the other one is likely to follow.

The main reasons for these trends are statements from China that it will maintain a loose monetary policy, as well as yesterday’s unexpected high Crude Oil Inventories report. Crude Oil Inventories simply showed that oil supplies in the U.S have grown substantially; highlighting weak demand and possibly lower growth forecasts. Every time this report offers surprising results, a sharp change in oil’s value is promptly followed. This time around, the result was to push the price of Oil lower than was anticipated.

Today’s leading publications:
07:55 (GMT) – German Unemployment Change:

This report will show if the German unemployment condition has worsened in line with expectation during June. If the actual result will be similar to forecasts, the EUR is expected to drop.

12:30 (GMT) – U.S Unemployment Claims:

This report shows the changes in U.S unemployment during the last week. Analysts forecasted that 573K people have lost their jobs during the past week. Such result will be the worst result in the past 4 weeks and is likely to strengthen the demand for the safety of the Dollar. However, if the actual result will be somewhat better, then the Dollar might lose some steam.