The dollar rose against the euro and yen on Tuesday ahead of Thursday’s release of US inflation data for indications of when the Federal Reserve is likely to cut interest rates.
The dollar index hit a five-month low in December as investors thought the Federal Reserve would cut interest rates sooner rather than later as inflation slows near its 2 percent annual target and economic data shows signs of easing.
Crude oil prices rose more than 1 percent, extending the previous session’s gains, as geopolitical tensions in the Middle East and an oil production shutdown in Libya continued to support oil prices.
Libya’s Sharara oil field has halted oil production since last week amid political protests, taking about 300,000 barrels a day off the market.
The protracted war in Gaza and Houthi attacks on shipping in the Red Sea have also raised fears of a wider conflict in the region that could further disrupt supplies.
Gold prices traded in neutral conditions yesterday as investors refrained from making big bets ahead of US inflation, which could provide more clarity on when the Federal Reserve might start cutting interest rates.
Copper prices, often seen as an indicator of economic health, were under pressure on Wednesday as traders weighed global economic headwinds, while a weaker yuan weighed on buying interest in top consumer China.
Global economic growth is expected to slow for a third consecutive year in 2024, prolonging poverty and undermining debt in many developing countries, the World Bank warned on Tuesday.
The World Bank also projected that China and economic growth will slow to 4.5% in 2024. The World Bank predicted a climate-driven slowdown to 4.5% in 2024. Growing expectations that China will ease its pro-economic policies led to a weaker yuan, making it more expensive for Chinese buyers to buy the precious metal.
MCX gold futures up 0.14% to 62179. Silver settled down by 0.22% at 72427. Copper fell 0.05% to 720.35. Crude oil 5863, down 4.32%. Natural gas gain 0.08% to 236.70.
Economic data and events scheduled today- Will crude oil inventory take centre stage?
Australia
At 6.00am- CPI y/y. Data is foreseen at 4.4% from previous 4.9%.
Above data could have a positive impact on the dollar.
Eurozone
At 1.15pm- French Industrial Production m/m. Data is foreseen at 0.1% from previous -0.3%.
At 2.30pm- Italian Retail Sales m/m. Data is foreseen at 0.2% from previous 0.4%.
Tentative – German 10-y Bond Auction.
All above data could have a volatile impact on the Euro.
UK
At 7.45pm- BOE Gov Bailey Speaks.
Above data could have a volatile impact on the Pound.
US
At 8.30pm- Final Wholesale Inventories m/m. Data is foreseen at -0.2% from previous -0.2%.
At 9.00pm- Crude Oil Inventories. Previous was at -5.5M.
At 11.31pm- 10-y Bond Auction.
Above data could have a volatile impact on the dollar
Commodity Samachar
Learn and Trade with Ease
Also Read: The 15% Rise in Natural Gas – What’s the Story? , Economic Outlook: Is the Commodity Market Poised for a Surge this Week?
Recommended Read: Forex News Letter : What Awaits Traders in the Market’s Downward Trend?
Want help on your traders?
Chat with our Analyst