Market Drivers – US Session, October 13

Following a decline on Thursday due to negative market sentiment, the Canadian dollar saw a minor recovery on Friday. Following a CPI inflation beat, investors supported the US dollar over worries that Fed interest rates would remain high. The Canadian currency, tied to crude oil price movement, is also strengthening as traders try to end the trading day on a positive note after hitting a new low for the week.

Oil prices rose by 6% on Friday, with Brent recording its largest weekly gain since February. The Middle East conflict may intensify as Israel conducts ground incursions into the Gaza Strip. Brent saw a weekly gain of 7.5%, the highest since February. The Middle East conflict has not significantly influenced the world’s oil and gas supplies, but investors are analyzing how it can worsen and affect supply from neighboring nations. Oil prices are expected to exceed $100 per barrel due to the Middle East crisis, and Saudi Arabia is postponing US-backed efforts to normalize relations with Israel. OPEC predicts a rise in global oil demand.

Gold prices have surged over 3.21% due to the Israel-Palestine crisis, with the price trading around $1,929. The rise in geopolitical tensions and the shift from air to ground operations in Gaza has prompted traders to seek gold as safe-haven assets. The US dollar is also strengthening, with the troy ounce of the XAU/USD currently trading at $1,929.20. As investors seek protection, gold is reportedly nearing the $2,000 mark. US consumer sentiment is declining, and the Philadelphia Fed’s dovish comments have slowed down Treasury bond yields. The US Dollar Index is up 0.08%, while safe-haven assets are moving upward.

Economic Data

During the Asian trading hours, the data from China showed that the trade surplus widened to $77.71 billion in September from $68.36 billion in August. On a yearly basis, Imports and Exports both contracted by 6.2% in the same period.

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