A Calm Start to the Week on Markets, Awaiting Central Bank Decisions. Oil Prices Surge Amid Rising Tensions in the Middle East. Few Macro Events on the Calendar to Influence Today’s Trading.
Gains and Losses
The last week of August is unfolding in a rather relaxed, holiday-like atmosphere, with low volatility in major assets. Yesterday brought a slight strengthening of the U.S. dollar, particularly against the euro, but the downward movement has stalled around $1.1160. This comes as no surprise, given the dovish message from the Fed Chair in Jackson Hole on one hand, and renewed tensions in the Middle East on the other, which keep safe-haven assets like the USD in demand. The calendar for the rest of the week doesn’t feature many significant events, except for Friday’s PCE inflation data from the U.S. It seems that any decisive moves in the popular EUR/USD pair will have to wait until the central bank meetings in September, first from the ECB and then the Fed.
Significant Upward Movement
While the start of the week on the markets has been relatively calm, there are exceptions, notably the sharp upward movement in oil prices, which have surged by several percentage points. This is the result of escalating conflict in the Middle East, specifically Sunday’s Hezbollah attack on Israel. Last week, there were talks of a ceasefire, but now tensions have flared again, with talk of the conflict only just beginning. Reports have emerged about halted production in Lebanon, and there is also the looming threat of a blockade of the entire Strait of Hormuz. As such, it seems we can forget about cheap oil in the coming days, and technically, there is also room for further price increases. Market participants are also beginning to position themselves ahead of the upcoming OPEC meeting, where speculation is rife about a possible reduction in production cuts, a bullish factor for prices. Of course, much will depend on where prices stand at that time, as OPEC members are known for their greed, and higher prices often deter them from cutting production.
Stagnation in PLN
The Polish currency is also experiencing little movement, with EUR/PLN stuck in the 4.25-4.30 range, shifting up or down depending on changes in the main currency pair, but these are mostly cosmetic changes. Today’s calendar features the U.S. Conference Board Index at 4:00 PM, which usually doesn’t cause much market movement, but on a day like today, it could trigger some action in the FX market. Additionally, Nvidia’s earnings, to be released tomorrow, are worth keeping an eye on. If the high expectations are met, it could drive the stock to new all-time highs and potentially lift the broader market, not just on Wall Street, as we’ve seen in the past.
Author: Krzysztof Pawlak, Currency Analyst at Walutomat.pl
Source: [Manager Plus](https://managerplus.pl/ropa-w-gore-dolar-umacnia-sie-pln-bez-wiekszych-zmian-80475)
