Crude oil price falls as Saudi Aramco stock starts trading
The price of crude oil declined as the shares of Saudi Aramco started trading in Riyadh. Brent, the global benchmark, lost 48 basis points while West Texas Intermediate lost 44 basis points. Meanwhile, in Riyadh, Aramco’s stock price soared by 10%. This followed a four-year drive by Crown Prince Mohamed Bin Salman to list the company that supports the Saudi Arabian economy. The company raised just $25.6 billion from investors at a valuation of more than $1.7 trillion. The Crown Prince had aimed for about $44 billion and a valuation of more than $2 trillion. Still, this valuation makes Aramco the biggest and most profitable company in the world. The market will receive important inventories data from the US later today.
Sterling wobbled today, as the UK prepares for tomorrow’s election. This will be one of the most important elections in the country’s history. While Jeremy Corbyn has campaigned to take the country to another referendum, Boris Johnson wants to get Brexit done, pledging to negotiate a deal with the European Union by the end of 2020. The GBP/USD pair has struggled to move above yesterday’s high because of a YouGov poll that predicted another hung Parliament. The poll showed that Tories will have a 43% win compared to Labour’s 34%. The poll showed that Johnson’s majority had declined from 68 to 28. A hung Parliament will likely lead to more uncertainties over Brexit.
The dollar declined against the euro after the Bureau of Labor Statistics (BLS) released the official inflation data for November. The headline CPI rose on a seasonally-adjusted rate of 0.3%. This was a slight decline from October’s rise of 0.4%. Consumer prices rose by 2.1% over the last twelve months. This inflation was led by increases in shelter, energy, medical care and recreation. Meanwhile, the so-called core CPI remained unchanged at 0.2% and 2.3% on a MoM and YoY basis respectively. This data came a few hours before the FOMC is expected to release its interest rates decision.
The XBR/USD pair declined today as the market reacted to Aramco’s IPO and the recent OPEC+ meeting. The pair is trading at 63.37, which is slightly below the month’s high of 64.45. The pair has consolidated on the channel shown in red below. The price is slightly below the lower line of the envelope indicator. It’s possible that the pair will move below the support of 63.11 after the EIA releases the inventory data.
The GBP/USD pair declined slightly as the market waited for the election and FOMC decision that will be announced later today. The pair is trading at 1.3148, which is slightly below the month’s high of 1.3216. The RSI has moved slightly higher while the dots of the Parabolic SAR are trading above the price. However, this is happening in a low-volume environment, which means that a breakout may happen ahead of the election results and FOMC decision.
The EUR/USD pair rose today after the CPI data and ahead of the FOMC decision. The pair rose to a high of 1.1086 from an intraday low of 1.1070. The price is slightly above the 61.8% Fibonacci Retracement level. It is also slightly above the middle line of the Bollinger Bands. It is slightly below the two-day high of 1.1098. The pair may see some significant movements later today as the market react to the FOMC statement.