Brexit Uncertainty Weighs on Pound; Dollar Surges

USD

The dollar index, which measures the greenback against a basket of major currencies, edged higher to 97.60 amid renewed Brexit uncertainty. The UK parliament passed the Withdrawal Agreement Bill with a vote of 329 to 299 but failed to approve the timetable motion with a vote of 308 to 322. Now, the ball shifts to the EU's court to decide on whether to extend the Brexit deadline or not. A series of possible scenarios are valid at the moment, among them: technical extension, longer extension (January 31, 2020), “no-deal” Brexit, general election, or a second referendum. The recent developments weighed on the European currencies and investors were seen shifting to safer currencies. The GBPUSD declined to $1.2840, the EURUSD dropped to $1.1117, and the USDJPY fell to 108.24.

Metals

Gold prices inched higher as Brexit uncertainty weighed on the risk sentiment. The Brexit Saga is subjected to various scenarios with different risks. The precious metal serves as investors' safe-haven in times of heightened market risks and uncertainty. The price of a gold ounce rose to $1494, the price of a silver ounce rallied to $17.56, and palladium continued to hover near a record high of $1760.

Oil

Oil prices settled higher on expectations of further OPEC supply cuts, but API data erase partial gains. The Organization of the Petroleum Exporting Countries is considering whether to increase supply cuts to offset the weak demand for oil. OPEC and other producers such as Russia will be meeting on the 5th and 6th of December. On the other hand, the American Petroleum Institute reported a buildup of 4.450 million barrels in US oil stock last week. The official figures will be released today by the US Energy Information Administration. The West Texas Intermediate crude futures traded slightly above $54, and Brent futures drifted lower to $59.31.

Major Economic Events

Disclaimer 

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM.COM. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.