Oil price recovery supports exporters
(MENAFN- FxPro) We enter the last day of what has been a fairly volatile trading month. Everyone expects August to be quite and it rarely ever is. For example, it was August 2011 when the VIX previously spiked to current levels on the back of the US budgetary problems and ratings downgrade in the US. We have seen the dollar recover through the course of the week but this is more down to the sharp reversal seen against the single currency and also sterling. If you look at the price action on US interest rate futures, then the market's opinion on a September rate increase has changed little, with the odds still looking to be around 20%. Asina stocks are mostly firmer, with the Shanghai composite looking to end the day in positive territory for the second consecutive day. The other relevant price action for currencies has been the oil price, with weaker than expected inventory data in the US allowing a sharp recovery in Brent back to the 48 level. The Russian rouble has reversed from the 70 level as a result on USDRUB, with the Norwegian krone and Canadian dollar also performing well on the back of the oil price.
The data overnight in Japan has shown a familiar picture, of continually low inflation, slightly better than expected retail sales and the jobless rate falling from 3.4% to 3.3%. Other data today arrives in the form of revisions to UK GDP data and Eurozone business and consumer confidence data at 09:00 GMT. We also see PCE data in the US at 12:30 GMT, with final Michigan confidence data at 14:00 GMT. Overall, it's going to be equities and the oil price that determine direction for currencies.
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