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Crude oil futures fell in early trade on Wednesday as the U.S. dollar held around three-week highs and industry stocks data indicated a build in U.S. crude inventories.
South Africa’s rand weakened against the dollar on Tuesday, with investor caution over a political row involving the country’s finance minister hanging over the markets.
Nigeria’s central bank sold around $1.5 million at the interbank forex market on Tuesday to support the local currency and ensure the closing rate settles after a torrid week. A militant group said on Tuesday it attacked a pipeline operated by a subsidiary of Nigeria’s state oil company in the country’s southern Delta region, just a day after the most prolific rebel group in the restive energy hub said it had halted hostilities.
Kenyan shilling was stable against the dollar on Tuesday with demand coming from importers and manufacturers expected to put pressure on it, traders said.
All quiet on the Western front. Investors and traders sit on the sidelines trading in a range as we await quite possibly one of this year’s most eagerly awaited NFP report due Friday. The report will rubber stamp the FED’s decision whether to hike rates in September or not. FED Vice Chairman Stanley Fischer noted yesterday that the pace of future FED rate increases will depend entirely on the economy’s performance (seems the FED are changing their stance slightly in that they earlier indicated rate hikes are not only US data dependent but also dependent on China, the EU and Brexit fallout). Fischer also said the U.S. economy appears to be on a 2% growth pace and heading toward full employment, and said the strength of the dollar wasn’t an issue for now. Fisher further hinted if Friday’s payrolls report is reasonably in line with expectations, it could clear the way for one, or possibly two, Fed rate hikes by the end of the year.
For this reason as I have noted above Friday’s NFP number is a real GAME CHANGER. IF the number is strong (250k+) the FED will probably hike rates in September and in turn set about changing the course of the USD for the coming months. A rate hike in December is then a formality one should think unless of course there is a Republican President in office in November. Make no mistake, should “the Donald” win the election in November it will set about all sorts of mayhem in the financial markets as we await his economic policies. The fear of the unknown is giving traders some serious food for thought and has led to investors pulling billions of USD from funds. While some people might not agree or like Ms Clinton, truth is she is the safer bet. Look at what happened to the UK on the 23rd June, we all thought people would never vote to leave given the fear of the unknown. Well how wrong we all were. The US elections will be no different, anything is possible.
As far as the UK and the GBP is concerned, PM May is meeting her MP’s at Checkers today to discuss Brexit and the consequences and more importantly when to invoke Article 50. However that appears to be heading for the Supreme Court as a group of individuals want Parliament to vote on Brexit and Article 50. Rocky times ahead for the GBP I have to say. Still I am hopeful things will stay the same for the next few years as negotiations take place and we have a template for the UK outside the EU.
I AM VERY WORRIED!!!
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