On Friday (December 29), the US dollar index hovered around a one-month low, and is expected to fall 0.5% this month and may close more than 9% this year, the worst annual performance since 2003. The dollar may continue to decline against other major currencies next year. Commodity-related currencies such as the Australian dollar and Canadian dollar hit two-month highs as energy and metal prices rose. U.S. oil broke the $60 mark and rose to more than two-year highs as buying prices fell unexpectedly and reduced commercial crude oil inventories sparked. Gold prices remained stable around a one-month high of $1,295, and are expected to hit their best annual performance since 2010, driven mainly by weaker dollar and global political uncertainty.
★Review of foreign exchange market in Asia: The US dollar hovers at a one-month low, and commodity currencies continue to rise★
USD index trading at a recent month low of 92.61, and is expected to fall 0.5% this month and may close more than 9% this year, the worst annual performance since 2003. The dollar may continue to decline against other major currencies next year.
Shin Kadota, senior strategist at Barclays in Tokyo, said that the re-adjustment of market participants shows that the US dollar has been sold out across the board before the end of the year, especially against the yen. Seasonal trends in the foreign exchange market show that the dollar tends to weaken after Christmas to the first few days of the year and will eventually be bought back again.
Many institutional investors checkouts at the end of the year, and such activities are expected to put pressure on the US dollar. The end of the year is the deadline for tax filing and reporting performance.
USD fell in 2017, despite U.S. economic expansion, the Federal Reserve tightened monetary policy, and the United States passed a tax reform bill.
Tensions on the Korean Peninsula, scandals of Russian interference in the U.S. election and low U.S. inflation are some of the factors that suppressed the U.S. dollar in 2017 and may continue to put pressure on the U.S. dollar in 2018.
Team of strategists at Sumitomo Mitsui Asset Management said the Federal Reserve and the European Central Bank were preparing to normalize policies in 2018, but currency volatility may be suppressed due to limited inflation concerns. But the geopolitical risks associated with North Korea and Middle East , as well as the political risks posed by Brexit negotiations and the U.S. midterm elections, are worth paying attention to in 2018.
Euro remained stable against the US dollar near 1.1947, approaching the one-month high of 1.1959 that hit the previous day, with a cumulative increase of 0.3% in December.
Italy announced that it will hold a general election on March 4. As this matter was expected by the market, the euro responded mediocrely. Italian elections are expected to produce a standoff in parliament and could cause volatility in the Italian market.
In addition to political factors such as Italy's March election, how the European Central Bank reduces large-scale monetary stimulus measures is also a key factor facing the euro in 2018.
Euro has risen 13.5% this year, the best annual performance since 2003. The French election has given the market a sigh of relief. The outside world expects the European Central Bank to normalize monetary policy and the market calms down the political situation in Germany and Spain. These factors have boosted the euro.
AUD versus USD was roughly trading at 0.7795, and it hit a two-month high of 0.7810 overnight. The Australian dollar is expected to record a 3% html-month increase, with rising prices of commodities such as iron ore and copper supporting it.
USD versus Canadian dollar expanded its overnight decline, setting a low of 1.2553 since October 20. The US dollar is expected to fall 2.5% against the Canadian dollar December monthly line, boosted by rising crude oil prices.
NZD rose slightly against the US dollar to around the 0.71 mark, the highest level since October 19. The New York dollar fell back to a 17-month low of $0.6781 against the US dollar in November, affected by the change of ownership of the domestic government, but then rebounded by nearly 5% from that low.
Bitcoin rose 3.2% to $14,908.44 on the Bitstamp trading platform, and fell 6% on Thursday. Bitcoin has emerged from the record high of nearly $20,000 that it hit 12 days ago, but the annual line still soared by about 1,400% in 2017.
★Crude oil futures: US oil broke through US$60 to a high of more than two years, as US oil production unexpectedly declined★
US oil broke through US$60 mark and rose to a high of more than two years, U.S. crude oil rose through US$60 mark in the short term, setting a new high of US$60 since June 2016 to US$60.14/barrel; Brent crude oil also hit its high of US$66.46/barrel since June 2016, triggering buying.
Brent and U.S. crude oil rose 17% and 12% year-on-year, respectively, but the rise since the middle of the year has been stronger, with an increase of nearly 50%.
U.S. oil production fell unexpectedly, stimulating U.S. crude oil rose on Friday. U.S. oil production fell to 9.754 million barrels per day last week from 9.789 million barrels per day in the previous week, data released by the Energy Information Administration of America (EIA) on Thursday.
US commercial crude oil inventories have decreased, further boosting US crude oil futures. According to EIA data, U.S. crude oil inventories fell by 4.6 million barrels to 431.9 million barrels in the week ending December 22.
China announced the first batch of import licenses in 2018, with a total crude oil import quota of 44 companies totaling 121.32 million tons. Based on the expected total quota, China's crude oil imports are expected to hit another record high in 2018. In terms of supply, Brent crude oil was boosted by production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia. The production cuts began in January last year and will continue until the end of 2018.
Libya and North Sea oil pipelines are interrupted, which also supports oil prices. However, these interruptions are expected to be resolved by early January.
★In terms of stock market: In the whole year of 2017, the Shanghai Composite Index rose 6.56%★
Both Shanghai and Shenzhen stock markets rose, and the Shanghai Composite Index recovered 3300 points to end the 2017 final journey;
The Shanghai Composite Index closed up 0.33%, up 10.79 points on Friday, up 3307.17 points, up 0.31% this week, down 0.30% this month, up 0.30% for the whole year, up 6.56% for the whole year;
Shenzhen Component Index closed up 0.61% on Friday, up 66.44 points, up 11040.45 Points, this week fell 0.48%, this month rose 0.88%, and the whole year rose 8.48%;
Shanghai and Shenzhen 300 Index closed up 0.30%, up 11.96 points to 4030.86 points, this week fell 0.59%, this month rose 0.62%, and the whole year rose 21.78%;
ChiNext Index closed up 0.44%, up 7.63 points to 1752.65 points, this week fell 1.50%, this month fell 1.00%, and the whole year fell 10.67%.
Japan East Stock Exchange Index closed down 0.1% on Friday to 1817.56 points;
Japanese stock Nikkei 225 index closed down 0.1% on Friday to 22764.94 points.
Australian stock market indicator SP/ASX200 index closed down 0.31% at 6069.0 points on Friday.
★Precious metals: Gold prices are near the one-month high and are expected to hit the best annual performance since 2010★
Gold prices remain stable near the one-month high of $1,295, and are expected to hit the best annual performance since 2010, mainly driven by the weakening of the US dollar and global political uncertainty.
Analysts said that gold prices closed above the 100-day moving average on Wednesday, the first time since the end of November, and the momentum brought by the technological breakthrough supported the gold price.
Spot gold has risen by more than 1.5% so far this week and may rise for three consecutive weeks, with an increase of more than 12% so far this year. Gold prices are expected to record their best monthly performance since August.
Spot gold rose for the ninth consecutive trading day on Thursday, excluding Christmas holidays, the longest daily rise since July 2011.
Spot silver has risen 5.7% this year. Spot platinum hit a three-week high of $927.50 per ounce last day. Platinum has risen 2.6% this year.
spot palladium was basically flat at $1065.74 per ounce, hitting its highest since February 2001 by $1072 last day. It has risen nearly 57% this year, performing the best among precious metals, and is expected to hit its best annual performance since 2010.
Huitong Finance Yihuitong Market Software shows that at 15:41 Beijing time, the US dollar index was 92.58/59.
