New year, new dollar

Hopefully your 2018 is going better than the greenback, which is down 0.8% against a basket of major currencies thus far. The trend of substantial dollar weakness could be of concern: euro has rocketed from lows in the 1.04s to 1.21s and sterling from the 1.22s to the 1.36s in less than a year.

Oil enjoying dollar decline

Brent crude has come all the way back from the doldrums of the mid-$30s per barrel to almost two-and-a-half year highs – around $70 per barrel. Market forces, such as tightening supply and a falling U.S. dollar, can be to blame for those rising prices you’ve been seeing at the pump.

For those concerned, this sudden spike in prices could be temporary, however. Only three days ago the EIA forecasted Brent crude to average only $59.74/barrel in 2018 and a mere $61.43/barrel in 2019.

End of NAFTA?

The North American Free Trade Agreement (NAFTA) in its current form is almost certainly on its last legs. President Trump has been very outspoken in his criticism of the agreement since his 2016 campaign.

Even with broad U.S. dollar weakness, the uncertainty arising from how far apart the leaders appear to be has held back the Canadian dollar and Mexican peso. Look for volatility in these currencies to continue leading up to negotiations between U.S., Canadian and Mexican leaders on Jan. 23.

South Korea crushes cryptos

It seems South Korea’s justice minister is not the biggest fan of cryptocurrencies, as he is publicly proposing a ban of local exchanges.

After the biggest cryptocurrencies started receiving mainstream attention in 2017, 2018 could well mark a motif of government regulation around the world, if this and China’s ban back in September are any indication.

Matthew Worley, The WorldFirst Team