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The Romanian leu stopped the USDRON pair from its uphill climb on the last few days of November thanks to the increase in confidence for the country’s economic performance. The country’s Economic Sentiment Index peaked its highest level in almost two years, or since 2017, last month, boosting the Romanian leu along the way. The pair had a solid downward momentum following that but trade tensions from Washington and Beijing are preventing the pair to continue contracting. However, it is believed that the leu has the power to bring the greenback lower as traders become more confident in the country’s economic growth. Just last month, the National Statistics Institute of Romania reported an increase of 3% (Year-over-Year) in the country’s third quarter performance. Still, the pair isn’t expected to break past and just bounce off its support as the above-mentioned GDP growth is significantly lower from the previous two quarters.
The US dollar and Norwegian krone pair is struggling to break through its current patterns in trading sessions. The krone took the opening from the US dollar at the beginning of the month after the downbeat US manufacturing activity report. However, the pair immediately made a reversal following Trump’s comments about China, further escalating the situation of Washington and Beijing. The pair will most likely hit its resistance due to the slowing economic performance of Norway. Last week, Oslo’s unemployment reportedly went up from 3.7% to 3.9% according to Statistics Norway, unfortunately exceeding expectations of 3.7%. And just this week, the country’s Manufacturing Purchasing Managers’ Index contracted from 55.3% to 53.7%. Although the figures still came in above expectations of 50.2% depreciation, thus raising uncertainties to whether the USDNOK pair can surpass its resistance.
The difference between both countries’ manufacturing PMIs determined the direction of the USDPLN in the previous sessions. And the pair is still expected to continue its steep decline even after the Polish Central Bank’s announcement later. The Narodowy Bank Polski, the central bank of Warsaw, is highly expected to hold its interest rates at 1.5% in this last meeting of 2019 considering its economic performance. In the bank’s December Financial Stability Report, it cited that the country’s financial system is stable and systemic risks are only moderate. Earlier this week, Poland’s Manufacturing Purchasing Managers’ Index improved from 45.60% prior to 46.70% beating forecasts of 46.60%. Although it’s still worth to note that the factory PMI is still below the 50%-mark that distinguishes growth and contraction. Meanwhile, the US manufacturing PMI also showed discouraging figures as it’s still in contraction zone for the fourth consecutive month.
The good performance of the Chinese economy is expected to reel the USDCNH pair lower this December. Three recent reports show promising figures from the Asian economic giant. First, the China Logistics Information Center showed that China’s manufacturing PMI finally rose from contraction, 49.3%, to 50.2% in November. Then, the private China Caixin Manufacturing PMI also showed improvement from 51.7% to 51.8%, topping expectations of 51.4% prior. Then earlier today, the China Caixin Services PMI also showed promising figures as it hiked to 53.5 from 51.1% when it was only expected to grow 51.2% prior. However, it is doubted whether the pair would actually surpass its support due to the rising tensions between Washington and Beijing. Just recently, US President Donald Trump suggested that the trade deal between the US and China could wait until after the 2020 presidential elections, further dampening the hopes of traders.