USD/TRY: the rise of the minimum wage in Turkey puts pressure on the value of the lira
The USD/TRY currency pair is gaining momentum in an uptrend, reaching a new historical high after the statement by Turkish Labor Minister Vedat Ishihan about a significant increase in the minimum wage in the country to 17,002 thousand liras this year. This step, which exceeds last year's figure by half, led to an accelerated increase in inflation: the December consumer price index jumped to 64.77%, reaching an annual maximum. The Central Bank of Turkey predicts a further increase in inflation to over 70.0% in May 2024, followed by a decrease to 36.0% by the end of the year.
Technical factors continue to support the US dollar, which is also responding to recent economic reports. Data from ADP showed an increase in employment in the US private sector, and unemployment statistics indicate a decrease in the number of applications for benefits. These factors contribute to strengthening the position of the US dollar against the Turkish lira.
- Resistance levels: 29.8683, 30.0000, 30.1500, 30.3000.
- Support levels: 29.7012, 29.4861, 29.3000, 29.0589.
USD/CAD: the US dollar is strengthening ahead of the release of labor market data
The USD/CAD currency pair continues to strengthen, approaching the 1.3360 mark and updating recent highs.
Today's restraint of traders is due to the upcoming publication of the report on the American labor market for December. Forecasts indicate a decrease in the number of new jobs outside the agricultural sector from 199.0 thousand to 170.0 thousand. The unemployment rate is expected to rise slightly from 3.7% to 3.8%, and the average hourly income will decrease from 4.0% to 3.9%. The market's attention is also focused on the recent ADP report, which showed an increase in employment in the US private sector to 164.0 thousand, exceeding expectations of 115.0 thousand. In addition, the decrease in initial applications for unemployment benefits to 202.0 thousand. confirms the stability of the labor market. Information about a possible reduction in Fed rates by the end of the year, revealed in the minutes of the last FOMC meeting, also has a positive effect on the dollar.
- Resistance levels: 1.3400, 1.3450, 1.3500, 1.3550.
- Support levels: 1.3350, 1.3300, 1 3250, 1.3200.
GBP/USD: British services sector shows signs of business recovery
The GBP/USD pair is hovering around 1.2680 in the Asian session, showing uncertainty in recovering positions lost at the beginning of the week, against the background of encouraging economic data from the UK.
The index of business activity in the British services sector in December rose to a July high of 53.4 points from 50.9, raising the composite index to a six-month high of 52.1 points. In the banking sector, the volume of consumer loans increased to 2.005 billion pounds in November, and the number of approved mortgage loans increased to 50.07 thousand.
On the other hand, the US dollar strengthened to 102.200 in USDX, reflecting positive data on the labor market: an increase in the number of people employed in the non-agricultural sector to 164.0 thousand in December and a decrease in initial applications for unemployment benefits to 202.0 thousand, which reduced the total number of applications to 1.855 million.
- Support levels: 1.2610, 1.2500.
- Resistance levels: 1.2730, 1.2830.
Crude Oil Market Analysis
In the Asian session, WTI Crude Oil prices are slightly rising, testing the 72.70 mark, expecting the week to close with a slight increase, while investors are taking a cautious position ahead of the December report on the US labor market.
The increase in quotations was caused by the news about the explosions in Kerman, Iran, on the memorial day of General Qasem Suleimani, and the shutdown of production at the Libyan field producing about 300.0 thousand barrels per day due to protests.
The market is going through a phase of global correction. According to the latest CFTC data, over the past week, net speculative positions in oil increased from 182.7 thousand to 199.3 thousand. In the context of the market balance, there is an increase in bullish positions among swap dealers to 18,382 thousand, while bearish positions amounted to 45,186 thousand. Over the past week, buyers slightly increased the number of contracts by 0.849 thousand, while sellers reduced them by 0.051 thousand, which indicates the wait-and-see position of market participants during this transition period.
- Resistance levels: 74.00, 75.00, 76.00, 77.00.
- Support levels: 71.77, 71.00, 70.00, 69.00.