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Dollar Survives Under the Dark Cloud of Recession

by Didimax Team

The united States Dollar was under a pressure. It was under the highest level in two decades. However, this currency is still survived because market is worrying about the risk of recession. 

Last week, this major currency was pushed due to a sequence of economy data in America. That release reduced the expectation that Federal reserve will continue to increase the interest rate aggressively.

Elsewhere, the Australian dollar is also sensitive to that risk. So far, AUD was closed by 0.3% weaker in the area of 0.69241. The cause of that weakening is the slumped commodity prices. 

The index of USD was seen around the area of 103.73 on Tuesday. This currency made it’s highest level in 20 years this Month. Based on the data, it was around the level of 105.54.

 

The Weaker US Economy Data Pressed the USD

There was a survey released last Friday which showed that consumers trust in America touched the lowest level ever. That is why; market is not sure anymore that the Fed will continue their Aggresive rate hike. 

However, the USD weakening is still able to be hold by dollar as one of the safe haven asset preferences and world economic slow down projection. An analyst then gave his opinion about that. 

His name is Joe Capurso where he thought that dollar was stronger when people worried bout global recession. Elsewhere, the price of world crude oil was closed in a trade yesterday. 

This closed a fluctuating trade because market participants waited for some anticipation steps due to gas and oil export from Russia. The decision may be taken in a G7 meeting later in Germany where many leaders will be there. 

A Concern about Limited Stocks is Appearing Again 

There is a concern appears in the market that stocks will be lacked or limited. The cause is an action done by the west country leaders. They found many ways to limit the Russia’n Wiggle Room. 

For your information, the wiggle room is needed to get any fund where the money will be used for war in Ukdaind. The G7 leaders are also talking a possibility about Iranian nuclear agreement renewal.

The most possible decision is maybe an increasing oil export numbers from those OPEC members. Yesterday, G7 has a strong plan to defend the Ukraine by giving many new sanctions. 

One of the sanctions is to limit the oil price from Russia. Pros and cons are then appearing due to this plan. Some agree with that, but the rests are not. 

The Oil Price Limitation Can be Hard to Do

According to Andrew Lipow as a consultant, price limitation for purchasing and selling the Russian oil is quite impossible. It is hard go. Imagine how that term could be applied. 

It is because India and China have been became that commodity consumers since many years ago. These countries are also considered as the biggest. 

Crude oil was closed in a weaker position last week. It happened in line with the interest rate increase which is done by many central banks. A fear about recession Is also a reason. 

A fear about the further rate hike possibility has been triggering fluctuatio and move the risk in this forex market. It seems that OPEC and some producers which are not the members will do their plan. 

The August Production may be Increased

That is about a plan to raise production in August period. The deal can be claimed again in their next meeting. A report from Reuters also revealed another fact. 

The OPEC+ may cut the oil surplus projection in 2022. The amount is about one million per day where it is lower than the numbers before in 1.4 million barrel for one day. 

Elsewhere, Libya yesterday also stayed that they may stop any export from the Sirte Bay. It is going to do within 72 hours due to the Riots that hampered production so far. 

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