Market Analysis

The Australian dollar remains a stellar performer amongst the leading currencies

 

RBA meeting minutes show policymakers latest dovish tilt

FOREX

The Australian dollar remains this week’s stellar performer amongst the leading currencies, gaining even more ground against the US dollar in early Thursday trading.

The Australian currency is fulfilling its role as one of the leading risk-related currencies, finding support as investors embrace the optimism generated by news that the latest Covid-19 variant may not lead to the worst-case scenarios many feared when it first captured news headlines. To some extent this week’s rally is a mirror image of the retreat to safety seen in the previous seven days, illustrating how quickly investors’ sentiment can turn.

This dynamic suggests caution as the picture isn’t yet completely clear on what sort of impact Omicron might have.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader

 

OIL 

WTI is flat on the day, having earlier in the session reached a new December high.

The latest reports indicate that the Omicron variant is unlikely to be as damaging as initially feared. This is supporting a rally in assets correlated to economic growth and perceived as riskier, which has also boosted crude prices. However, such gains are capped by the restrictions on economic activity taken in the meantime by several countries around the globe, aimed at curbing the quick spreading of Omicron. Despite the optimism of the last few days, some doubts remain on various aspects of the Omicron variant. Until there is more clarity on this matter, oil gains are likely to be capped.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader

 

EUROPEAN SHARES

European stocks had a mixed open despite a bullish Asian session supported by reassuring macro developments from China overnight. Most indices are now stabilizing, solidifying the recent gains registered after investors started to play down worries over the Omicron variant. The trading environment is however likely to stay significantly volatile as uncertainty remains regarding monetary policies in the US, especially after last week’s poor job report and high inflation numbers. Investors are likely to remain cautious and keep on monitoring the macro outlook, especially today’s US initial jobless claims, in order to gather more clues on what and when could be the FED’s next move.

Pierre Veyret– Technical analyst, ActivTrades        

 

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