Dollar punished by disappointing jobs report; Oil jumps on OPEC deal
|Appetite for the Dollar diminished on Friday after November's disappointing US jobs report reinforced expectations over the Fed taking a pause on rate hikes next year.
The United States added another 155,000 jobs last month which was below the 189,00 forecast, while October figures were revised lower to 237,000 from the first estimate of 250,000. With wage growth also falling short of market expectations - rising only 0.2% m/m vs the 0,3% forecast - the Dollar has found itself back in the crosshairs of bearish investors. Today's uninspiring report certainly addresses recent concerns over the US economy potentially decelerating, given the inversion of the US Treasury yield curve earlier this week. Although the unemployment rate remained unchanged at 3.7%, the overall US jobs report remains Dollar negative and is likely to create some uncertainty over the Fed's hiking path beyond December.
In regards to the technical picture, Dollar bulls are in trouble on the daily charts. Sustained weakness below the 97.00 level is likely to send the Dollar Index towards 96.40 in the near term.
OPEC + agree to cut oil production
A collective sigh of relief was felt across Oil markets after OPEC+ delegates successfully reached an agreement to cut production by 1.2 million barrels per day. OPEC nations have agreed to trim production by 800,000 barrels while non-OPEC members will handle the remainder.
This breakthrough in talks is a welcome development for financial markets and is seen supporting risk sentiment during the upcoming trading week. With OPEC agreeing to cut Oil production larger than initially expected, Oil prices are poised to extend gains in the short term. However, the medium- to longer-term outlook remains open to question. It must be kept in mind that US Shale production remains as robust as ever while concerns over slowing global growth are fuelling fears of falling demand for Oil. If escalating US-China trade tensions evolve into an all-out trade war, Oil markets will certainly be one of the many casualties.
Although WTI Crude staged a solid rebound following the OPEC production cut, bulls have a long way to go before reclaiming back any sort of control. A weekly close above $54.00 is seen opening a path towards $56.00 and $57.40 in the short to medium term.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.