By Vadim Iossub, Alpari

Due to talk of a growth in reserves and a slowing in the growth of the world economy, the price of oil remains under pressure and dropped to $44.6 from $45.9 per barrel of Brent. Tuesday morning saw a slight rise to $44.9, but this is nothing. The price of oil has therefore returned to the price it was at at the beginning of May, with a significant support sitting close to $43.3. This evening we may see a correction due to the API oil reserve coming out.

The US stock market has dropped slightly from its all-time maximum and the Asian stock markets are trading in different directions this Tuesday morning, with more of them down than up. The Nikkei 225 has fallen by 1.4%. The ASX Australia was down 0.1%. The Shanghai Composite increased 0.6%, and the Hang Seng was up by 1.2%. Futures for the S&P500 were trading at 2164; 0.1% below the closing level of the previous trading day.

The international currency research institute of the People”s University of China has published its report on the internationalisation of the yuan in 2016. The report highlights that a stable Chinese economy means usage of the yuan in transnational account settling, gradual perfection of financial infrastructure for the Chinese currency and a promotion of the “One road, one belt” dogma. The indicator for the internationalisation of the yuan is strengthening and for the past five years it has shot up by over 10 times. Despite fluctuations on Chinese markets and abroad last year, the tendency for internationalisation of the yuan is still positive. According to the report, up to the end of 2015, the quantitative indicator for the range of complex usage of the internationalisation of the yuan stood at 3.6, 43% higher than at the end of 2014, with the indicator increasing by more than 10 times over the past five years. It is expected that the yuan will overtake the Japanese yen and British pound in the next two years to become the third largest world currency after the USD and EUR.

The USD was trading down against the yuan this morning at 6.6754 (-0.0045 or -0.07%).

Since Monday, the USD has lost its position won last week. The EUR/USD yesterday rose from 1.0950 to 1.1000 and the growth on Tuesday morning continued to 1.1020. The DXY dollar index has fallen from 97.55 at the beginning of the week to 96.95 this morning. The US will see stats on housing market prices and sales of new homes today, in addition to business activity and consumer confidence.

Article submitted by Alpari.com