The dollar is fluctuating ahead of the US elections and oil...

Caution prevailed in foreign exchange markets, today, Tuesday, hours before the polls opened in the United States, as investors braced for possible disputes after the elections that could lead to a wave of dollar fluctuations.

The market’s attention is focused on the election results only, but instead of betting on a specific outcome, many dealers have resorted to safe-haven dollars to ensure a good position to take advantage of the fluctuations when the results emerge.

In early European trade, the dollar fell 0.2 percent against a basket of currencies to 93.831, after hitting its highest level in a month on Monday. The euro rose 0.26 percent against the US currency to $ 1.1670, and the British pound rose, standing at just under $ 1.30. The Japanese currency also slightly increased by 0.14 percent to 104.72 yen per dollar.

Analysts told “Reuters” that the victory of Joe Biden could weaken the dollar, given that he is expected to spend large sums on stimulus and adopt a more liberal attitude towards trade, which strengthens other currencies at the expense of the dollar.

The Australian dollar rose 0.1 percent, after initially declining after the Reserve Bank of Australia cut interest rates by 15 basis points to 0.1 percent, and announced a bond-buying program, which was largely expected.

In the context, oil prices continued to rise thanks to the US elections that are taking place today, in light of a state of recovery in the financial markets, today, Tuesday, but fears about the high number of Coronavirus infections around the world are holding back the oil’s achievement of more gains.

Brent crude futures rose 70 cents, or 1.8 percent, to $ 39.67 a barrel, while US West Texas Intermediate crude futures rose 78 cents, or 2.1 percent, to $ 37.59 a barrel. And the two benchmarks won nearly 3 percent on Monday.

The two benchmarks, which have fallen sharply over the past week, rose briefly on Monday, after the Russian oil minister held talks with local oil companies about a possible extension of restrictions on oil production in the first quarter of 2021.

The Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, representing the group known as OPEC +, have reduced oil production since May to support prices, and cut the cut to 7.7 million barrels per day in August. The group is set to cut cuts by 2 million bpd in January.

Commerzbank said, “The hope is now that the continuous cuts at their current levels will be a necessary bridge during the second wave of Covid-19 until the vaccines are distributed during (the first half of 2021).”

Libya’s high production also worries OPEC +. Production is on track to reach 1 million barrels per day in the coming weeks, up from 100,000 barrels per day only in early September.

OPEC holds its next full meeting on November 30 and December 1.
Two sources familiar with the matter said this week that the Iraqi Oil Marketing Company (SOMO) had notified customers that it intended to launch a third grade of export crude, dubbed Basra Medium crude, in January.

According to what the two sources told “Reuters”, and contained in a copy of the notification dated November 2, which was reviewed by Reuters, the new medium-high sulfur crude will be produced by separating Basra Light crude into two grades.

Iraq exports Basra Light crude from the Basra oil port in the south of the country. This crude represents the largest proportion of the country’s oil exports and revenues. Iraq’s exports of Basra crude reached about 2.77 million barrels per day in October.

The post stated that SOMO will set official selling prices for each of the three grades of crude. Buyers will have to notify the company by November 13 of the volumes they intend to load of each ore during 2021. Medium Basra crude may be part of the volumes that buyers are already requesting or additional quantities are required for 2021.