Commodities and Currencies are in Trouble
Unfortunately for many traders engaged in forex pairs and commodities, most of their financial assets are not doing too great this week – something that their binary trading counterparts need not even consider, apart from registering it for future trades. Japanese yen and government bonds have been the refuge for many dissatisfied investors last Monday.
Moody’s rips Turkey and the Philippines
Energy firms shared the fate of crude oil as investors brace for yet another attempt to stabilize the oil prices scheduled for next Wednesday. This meeting between Russia and OPEC nations will certainly leave a mark on commodity markets, at least as far as oil goes. The emerging markets have not done very well either, with Turkish lira and Philippine peso plummeted. Turkey has Moody’s Investor Service to thank for its currency taking a fall, since the rating has been downgraded to junk. As for the Philippines, President Duterte seems to be doing his utmost to alienate the investors and international community alike.
The uncertain week ahead
On the global scale, binary options may be a rare profitable exception this week, as the first debate in the U.S. elections between Hillary Clinton and Donald Trump will undoubtedly increase the volatility in the markets. Aside from that, Russia will have a large role to play, with regards to the conflict in Syria and talks with OPEC. Not to mention the speeches from Fed and ECB executives.
According to Bloomberg and its Dollar Spot Index, USD fell 0.2% against other major currencies, while the yen is doing the best out of the bunch. As for the value of the UK currency, the changes are minor, but this may change soon thanks to the results of a survey where more than 75% of executives stated they would consider relocating their businesses outside the country, if the UK did not manage to retain privileges it now enjoys as an EU member state – albeit for the time being.
The Philippine peso has not been lower in the last seven years, which is largely due to investors fleeing the country and its assets as a result of President Duterte’s literal war on drugs. It is certain that his public outbursts are not doing much to retain the confidence of foreign investors. The yen is likely to spiral out of control in the near future, as BOJ is running out of options to keep its value down, and more investors seeking refuge from instability in other markets.
Oil is expected to do relatively well early this week, as the preparatory talks in Vienna have been more promising than expected. It rose almost 4% in New York. There was no agreement between the two main opposing sides – Saudi Arabia and Iran, but there have reportedly been offerings of concessions on the Saudi side, provided Iran shows some good will as well. This makes sense, as Saudi Arabia is much more affected by low oil prices than Iran, who seeks to sell as much as possible in expectation that international sanctions will resume under the new U.S. President.
Citigroup predicts an uncertain period of gold prices, as Donald Trump is given 40% to win the election, and with investors gearing up for what will likely be the only interest rate hike this year. The first major contribution of President Trump – should he win the elections – would be an unprecedented volatility on forex markets as well as prices of precious metals.
From the looks of things, few people outside of forex and binary options markets have any reasons to celebrate this week, and even those who do owe it to their foresight concerning future price action. With Turkey and the Philippines taking the worst hits due to mostly external factors – or internal, depending on your world view – and most major currencies taking a fall except Japanese yen, things are likely to become even more eventful. The US presidential election is reaching the debate stage, and with 2016 entering into its final quarter, financial markets are becoming even more volatile than usual.