The US dollar continues to decrease, which began after setting a long-term peak at the beginning of the year. After yesterday’s declines, we see fragile recovery in the oil market, equity markets observe gentle withdrawal.

forex comparicThe dollar started the day with a mild weakness, generally losing 2 of the last 5 sessions. Tomorrow will have a speech president-elect Donald Trump, so on the markets returned wave of anxiety. Earlier, we saw enormous optimism, so any disappointment could trigger a strong correction to the earlier movements.


The American economy is doing well, which in the medium term should translate into USD strength, but the uncertainty associated with the policy of Trump and possible correction in the markets is a major risk factor. The dollar index morning lost -0.1%, from January 3 (14-year peak) had already fallen by 1.1%. Investors uncertainty is particularly visible in the currency market. The weakest GBP remains under huge political pressure associated with Brexit, while sensitive to the changing appetite for risk JPY gaining 0.2% today, yesterday strengthened by 0.9%.

Very interesting is also case of crude oil prices, which are falling in spite of a weaker dollar. The prices of black gold began the week of series of dynamic declines (-3% yesterday). Today, oil gently rebounds. There were some interesting information. The main reason for the recent decline in crude is given to the situation in Iraq, where covered with a large degree of autonomy Kurds produce and export as much oil as they want, regardless to the final agreement. Nigeria (not included in the final agreement) announced that December oil production from its reserves stood at 1.9 million barrels a day. But this is not a big surprise, because the authorities there already in late November indicated that they want to achieve this state of production. It’s still a result below the potential of this country, which is about 2.2 million barrels. Additionally spoke oil minister of Kuwait. He said that with the beginning of the year, only part of cartel members should decide to cut production. Note in the comment saying that the process of reducing oil production should take six months, which may be a disappointment for the market. Yesterday there were also positive signs from Russia, which lowered production.

Behind us interesting data from China. In December, the CPI, which reflects consumer inflation, has risen 2.1% y / y (0.2% m / m), while the consensus assumed a growth of 2.3% (0.3%). However, while prices paid by Chinese consumers were relatively stable, definitely bounced producer inflation . PPI index rose from 3.3% y / y to its highest level in five years equal 5.5%. So strong rebound rate was made possible thanks to a weaker yuan, which made definitely imported raw materials become more expensive. It is worth noting that in case of the PPI indicators four months previously we had to deal with deflation. China is one of the leading exporters, so the increase in the prices of their products can further drive the growing inflationary pressures in the world.

In case of the zloty (PLN) we observed a relatively quiet session. It strengthens relative to the weaker USD (0.3% USDPLN currently hovers around 4.13), slightly lost against the euro (-0.05% today 4.381). PLN is clearly stronger against the GBP burdened with political pressure, we are close to the round level of 5.00 (GBPPLN -0.7%). CHFPLN remains around 4.08 (-0.06% currently).

Adam Puchalski, Finance Market Analyst XTB

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