Open: New York Session | Forex, Metals, Oil, Agriculture December 30, 2020



Dollar indexThe dollar index, which closed with a loss in last session, seems to have carried over the negative sentiment in today’s session as well. Its New Zealand counterpart added 0.5% to 71.35 US cents.The Chinese yuan gained 0.2% to 6.5192 per dollar in the offshore market. The net FPI inflows yesterday stood at ₹2,350 crore (equity and debt combined).This trend is likely to continue and this can aid the rupee gain ground against the dollar. Rather, currencies of countries that export commodities and manufactured goods are likely to keep strengthening against the dollar, as would be seen in a typical global recovery.
But this time, reasons to expect a weaker dollar run even deeper. Breaking out of the range, the rupee (INR) closed at 73.32 on Tuesday, above the resistance of 73.50 against the dollar (USD). The U.S. dollar briefly rallied in March due to its haven role in investment portfolios. Meanwhile, the US dollar plunged to a multiyear low.
The Australian dollar gained0.3% to 76.035 US cents. That means its options are cheaper, dollar-for-dollar, than Amazon’s.


GOLD TECHNICAL ANALYSIS In the short-run, gold prices remain biased higher, supported by a rising trendline from late November. Over the remaining 24 hours, gold and crude oil may continue benefiting from the cautiously optimistic mood in financial markets. Will that be in 2021, when Davos is studying the unusual topic of “The Great Reset?” Will we finally see substantially higher gold and silver prices next year? The inflationary prospects of the stimulus package may work in gold’s favor.
China Chengxin International Credit Rating Co. had an AAA rating on the miner when it failed to repay the equivalent of $153 million in short-term debt on Nov. 10. Gold prices are trading down by 0.2% at Rs 49,950 per 10 grams. What does Turkey’s gold rush have to do with the creation of a new Islamic bank? The Elon Musk-led Tesla is also reportedly looking to tap Indonesia’s nickel reserves for EV components.


According to a US oil and gas agency, commercial crude inventories in the country fell sharply by 4.79 million bbl in the week ending the 25th of December. Oil prices fell all the way into negative territory, and U.S. oil production fell in response. I have worked in the areas of oil refining, natural gas production, synthetic fuels, ethanol production, butanol production, and various biomass to energy projects. Still, gasoline inventories fell by 718,000 bbl, compared to expectations of a 1.66 bbl build.
In 2019, global oil prices remained under pressure due to growing U.S. shale oil production. Growth-linked crude oil also followed higher, tracking cautious optimism in S&P 500 and Dow Jones futures in fairly thin trading conditions ahead of the New Year’s holiday. This could boost the vaccine programme in the country and lead to a gradual economic and oil demand recovery. I have over 20 years of international engineering experience in the chemicals, oil and gas, and renewable energy industries, and hold several patents related to my work.
In December 2019, OPEC and Russia attempted to respond to sliding oil prices with new production cuts. OPEC members met with Russia with the hope of announcing additional production cuts that might stabilize oil’s free fall.

United States

This followed a fairly choppy Wall Street trading session where equities declined on fading prospects of larger direct stimulus checks. Importantly, the Fed supported corporate debt, which reduced default risks and restored normal market functions following the deterioration in financial conditions resulting from the lockdowns. That premium has largely disappeared, though, as the Fed lowered short-term rates to near zero and launched a new round of asset purchases.
We expect the Fed to remain supportive for some time, with current Federal Open Market Committee (FOMC) projections showing rates remaining at this level through at least 2023.
The Fed also cut benchmark interest rates to near zero, reducing borrowing costs for business. President Trump has finally signed the new coronavirus relief and government funding package worth $900 billion into law. At this pace, the country is likely to miss Trump’s goal of 20 million doses by year-end, opening the door to cooling market optimism. While the debate is ongoing, Treasury Steven Mnuchin said that the $600 direct deposit payments should be starting to arrive fairly shortly.
Since leaving Wall Street I’ve dedicated my financial career towards studying this situation and helping people understand what’s actually happening. Fed, with its intention to keep supporting economic recovery, has indicated that it will not hike rates until 2023.


The ECB has been buying big quantities of eurozone government bonds, keeping their prices stable and making the investment safe for banks. MPS TO APPROVE EU-UK TRADE DEAL Adding to the positive tone in the UK, members of the British Parliament are about to approve the EU-UK trade deal. However, news emerged on Tuesday that Ryanair planned to put restrictions on non-EU shareholders, including depriving them of their vote. This effect is likely related to the EU financial rules.