In the week prior to Christmas there were not many market movers to shake up the market but the effect of the Federal Reserve’s decision still weighs on the US dollar and on the forex market.
The US currency, after taking what he could from its competitors, won on all currency pairs and it is also taking away precious air from the currencies of emerging countries.
The dollar rose in the wake of the surprising victory of Donald Trump in the United States and the decisions of the Fed to finally raise the interest rates.
This stimulus has led to heavy outflows in emerging markets, as a stronger dollar and higher US rates have tarnished the appeal of riskier assets such as the currencies of developed countries.
Herald Van Der Linde, HSBC’s head of equity strategy for Asia, noted that ‘both the dollar’s rally and the US bond yields are stalled by the end of December, not only expectations for growth stronger than the United States were granted, but those expectations were too high. ‘
In the week in fact, the very positive data on US GDP were announced.
The United States grew more than expected in the third quarter of 2016 and the final estimate of third quarter GDP shows an increase of + 3,5% year on year, against expectations at + 3,3% and the previous result to + 3,2%.
Oil prices, meanwhile, returns soaring after a slow session driven by the US market movers and the break of US dollar rally.
Market optimism has also a positive effect
The achievement of an agreement on output that can push a sustained recovery in the price of crude oil has a positive effect on oil prices.
The recovery of the oil price had suffered a setback last week due to an unexpected increase in crude oil stocks in the United States and the will of Libya to increase the production for the next months.
The price of Brent for February delivery was up + 0,90% to $ 55,86 per barrel; the price of WTI marked + 0,89% to $ 53,90 per barrel.
Talking about currencies, we should speak of the bitcoin rally.
For the first time since February 2014, the bitcoin has exceeded $ 800 this week and finally breaks its psychological threshold.
2016 was a record year for the bitcoin especially for its characteristic as a safe haven against economic uncertainty of recent times. The intangible currency is a very volatile but generally it is not related to other financial markets, making it an alternative investment when other assets depreciate.
Among the factors that have contributed to the rise, in addition to the changes in world politics, there is the uncertainty about the global economy and the future of Europe. So the bitcoin has become a safe haven for international investors.
We must also add that trading volumes in China increased from 10 million bitcoins in October and November to 3,5 million in a day.
2016 was an important year for investors in bitcoin. Who bought the crypto currency now enjoys a profit of approximately 87%.
Read more: Financial News Today