The Directorate of Petroleum Prices this morning reflects the cumulative vision of the market on what it considers the current level of risk with respect to the crisis in the Middle East. Brent oil rose to the beginning only to fall below the negotiated levels towards the end of last week. There is a strong consensus that indicates that if they will close the Ormuz Strait in retaliation for the weekend attacks by the US to three of its nuclear facilities, then oil prices would shoot at more than 100 USD/B, says Rabobank’s currency analyst Jane Foley.
The EUR/USD will fall to 1.12 to three months seen
“The contained reaction of risk aversion seems to reflect expectations of some interruption in the energy supply, although the limited movement in prices also suggests the opinion that they will not be uncontrollable. In line with other classes of assets, there has also been a safe refuge reaction in the currency market.”
“The most notable is that the USD has returned to its usual behavior showing a demand for safe refuge. This contrasts with its behavior for most of the year to date, when it failed to recover before the fears of a global deceleration caused by US tariff In USD after the strong sales pressure of this year.
“Since the market has been occupied by downloading USD since the beginning of the year, it follows that the risk aversion environment could generate concerns about a shortage of USD, especially since the USD remains a main billing currency. Given the point of view of the tail that the Fed could only cut rates once again in this cycle due to the inflation risks, we see the risk that the EUR/USD falls again to 1.12 three months horizon, although we hope that the USD will weaken again for the end of the year. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
