Oil Video 02.10.20.

Worries About The Impact Of Coronavirus Intensify As U.S. President Donald Trump Tests Positive For COVID-19

WTI oil continued its downside move after U.S. President Donald Trump reported that he and his wife had tested positive for coronavirus.

The news put significant pressure on the world markets which are worried that the situation may ultimately develop in a negative way, leading to turmoil ahead of U.S. presidential election.

The White House stated that Donald Trump was working from isolation. This statement calmed markets a bit, but oil remained under material pressure.

While this development created significant uncertainty ahead of U.S. election, it also reminded that the pandemic is far from over, and even the U.S. President can catch coronavirus.

In recent days, oil traders were worried about the prospect of a second wave of virus containment measures in Europe. At this point, no country followed Israel’s example, and no lockdowns were announced.

However, additional virus containment measures may put pressure on demand for oil even without nationwide lockdowns, and Trump’s positive test highlights this risk.

How Long Can OPEC Keep The Production Cut Deal?

Yesterday, we discussed the latest data which indicated that OPEC production increased by 160,000 barrels per day (bpd) in September.

OPEC’s exports also increased from 17.53 million bpd in August to 18.2 million bpd in September, so the organization put more oil to the world market at a time when demand recovery started to slow down.

If Libya’s production continues to recover and puts more pressure on oil prices, OPEC+ members may have more trouble reaching consensus about the pace of production cuts in the upcoming meetings.

Many OPEC+ countries face material budget shortfalls and would like to increase production to boost their oil revenues. For now, the fear of pushing oil prices

By Susan Mathew

Oct 2 (Reuters)Argentina’s peso dropped on Friday after the central bank said it would allow a managed float of the currency, while most other Latin American units fell as global sentiment took a hit after U.S. President Donald Trump tested positive for the novel coronavirus.

The Argentine peso ARS=RASL led losses with the bank saying it would abandon its current “uniform daily devaluations and introduce greater volatility” as the gap between the official exchange rate and the rate quoted in informal currency markets widened close to 93%.

The bank said it would offer trades at 76.95 pesos per dollar at Friday’s open, around 0.91% weaker than the close on Thursday. It also increased the important overnight repo rate to 24%, from the current 19%.

“Even if the number of measures announced is not low, we do not expect them to change the current dynamics. The measures are likely to be seen as insufficient and hence run the risk of being counterproductive,” Citigroup Latam FX strategists said a note.

The safe-haven dollar gained traction after Trump and wife, Melania, contracted the disease just four weeks before U.S. elections. FRX/

Brazil’s real BRBY, was flat with data showing industrial output rose, slightly less than expected, continuing a pick-up after shuddering to a standstill during coronavirus-linked lockdowns.

A Reuters poll showed that Latam currencies are set to remain weighed down this quarter by fears about Brazil’s public finances and Mexico’s close link to U.S. politics.

The real was on track for its fourth straight week of losses, down about 1.7%.

Mexico’s peso MXN= continued its recent trend of outperforming regional peers, up 0.7%, all set to post its biggest weekly rise in more than four months.

Currencies of Colombia COP= and Chile CLP= declined 0.7% and

By Susan Mathew

Oct 2 (Reuters)Argentina’s peso dropped on Friday after the central bank said it would allow a managed float of the currency, while most other Latin American units fell as global sentiment took a hit after U.S. President Donald Trump tested positive for COVID-19.

The Argentine peso ARS=RASL led losses with the bank saying it would abandon its current “uniform daily devaluations and introduce greater volatility” as the gap between the official exchange rate and the rate quoted in the country’s informal currency markets widened close to 93%.

The bank said it would offer trades at 76.95 pesos per dollar at Friday’s open, around 0.91% weaker than the close on Thursday. It also increased the important overnight repo rate to 24%, from the current 19%.

“Even if the number of measures announced is not low, we do not expect them to change the current dynamics. The measures are likely to be seen as insufficient and hence run the risk of being counterproductive,” Citigroup Latam FX strategists said a note.

“Even if increasing the repo rate is a move in the right direction, the size of the increase is probably too small given the size of the imbalance currently observed in the official FX market,” they said, adding that raising the rate of volatility of the official FX rate will not encourage a higher supply of dollars but rather have the opposite effect.

The safe-haven dollar gained traction after Trump and wife, Melania, contracted the disease just four weeks before U.S. elections. FRX/

Mexico’s peso MXN= fell as much as 1% before trading steady, while the currencies of Colombia COP= and Chile CLP= declined 0.4% and 0.6%, respectively.

Brazil’s real BRBY, meanwhile, rose 0.6% in volatile trade with data showing industrial output in the country

By Gertrude Chavez-Dreyfuss

NEW YORK, Sept 30 (Reuters)The dollar fell against most currencies in choppy trading, as risk sentiment improved after U.S. government officials expressed hope that another stimulus package could be passed to help ease the economic impact of the coronavirus-induced recession.

The greenback slid against the yen and weakened versus currencies associated with higher risk appetite such as the Australian, New Zealand, and Canadian dollars.

U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin both expressed hope for a breakthrough on additional COVID-19 relief on Wednesday, as they prepared to resume talks aimed at hammering out a bipartisan deal.

“Renewed hopes for stimulus have whetted appetite for risk at the dollar’s expense,” said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.

“It’s encouraging to hear the rhetoric, but until it is signed, sealed, and delivered, the market will be skeptical,” he added.

The dollar index was last trading little changed on the day at 93.90 =USD. The index hit a two-month high last Friday.

Tuesday’s highly contentious debate between U.S. President Donald Trump and Democratic challenger Joe Biden boosted the dollar earlier, as it reinforced concerns that the outcome of the Nov. 3 presidential election could be contested.

Trump and Biden battled fiercely over the Republican incumbent’s record on the coronavirus pandemic, health care and the economy in a chaotic and ill-tempered first debate marked by personal insults and Trump’s repeated interruptions.

“The debate just confirmed that the election would be pretty much contested if it’s anywhere close,” said Edward Moya, senior market analyst at OANDA in New York.

The greenback was also boosted by quarter-end and month-end portfolio rebalancing, analysts said. Demand for dollars tends to rise at the end of quarters as