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Rising dollar drives commodities down
The U.S. Dollar has strengthened significantly, spurred by optimism around Trump’s economic policies, which support the Greenback
The Chinese market faces increased pressure from potential trade war risks
Crude oil prices continued their slide
The Dollar’s rise could continue to impact global markets
The first full week of November has been exceptionally impactful for global markets. With the U.S. presidential, Senate, and House elections finalized, followed by the FOMC's decision to cut interest rates by 25 basis points, emotions ran high among investors. Attention now shifts to the upcoming week, where key economic data from the U.S., China, and the United Kingdom will be closely monitored.
Next week’s major highlight will be the U.S. CPI inflation report on Wednesday, followed by the PPI inflation report on Thursday. The UK is set to release its GDP report and labor market data next week. The upcoming data will offer insights into the current UK economic situation.
China
The Chinese market has faced two significant challenges this past week. First, the Republican victory in the U.S. elections raised concerns about potential trade wars and increased tariffs on Chinese goods. Second, China’s Standing Committee of the National People's Congress (NPC) discussed the need for additional stimulus.
Commodities
Gold’s downward trend persists, currently trading in the $2,630s—nearly $50 down from last week’s close. A stronger U.S. Dollar (USD) is primarily to blame, driven by the anticipation of Trump’s economic policies, which are seen as supportive for the Greenback. As gold is typically priced in USD, a stronger Dollar tends to push gold prices down. Trump’s pro-tariff stance, along with plans for tax cuts, is expected to increase inflation, slowing down the pace of future Fed rate cuts, which could further bolster USD strength.
Silver prices (XAG/USD) dropped below the critical support level of $31.00 in Monday’s North American session.
Crude oil prices fell over 1% on Monday, extending losses from Friday and approaching a seven-day low. Traders are looking ahead to the monthly OPEC report on Tuesday, though expectations remain low following OPEC’s recent decision to extend production limits by a month. Market sentiment is also cautious, given concerns over potential tariffs on Chinese imports under Trump’s administration, which could reduce Chinese demand for oil.
