Oil climbs slightly as US dollar index rises with Asian stocks tumbling

Oil prices rose slightly during Wednesday’s trading,
and the US dollar index,
which measures the currency against six major counterparts,
climbed as stocks slumps in Asia and bond yields rose Wednesday,
as investors prepared to raise interest rates from
the US Federal Reserve later in the day.

topic’s

Oil rises slightly and Brent at $90.84 per barrel

Asian stocks tumble as markets brace for strong Fed rally

The US stock market ended trading in the red zone in anticipation of the Fed’s decision

Dollar Rises as Investors Brace for Federal Reserve decision

Oil rises slightly and Brent at $90.84 per barrel

Oil prices rose slightly on Wednesday morning
after falling to two-week lows the previous day,
due to the strong dollar in anticipation of a series of central bank meetings.

By Wednesday morning,
November Brent crude futures rose by $0.22 by 0.24 percent
on the London Futures Exchange to $90.84 per barrel
and Brent crude fell by $1.38 by 1.5 percent to $90.62 per barrel on Tuesday.

WTI futures prices for September rose by $0.15,
declining by $0.18 per barrel to $84.09 per barrel
at this time in electronic trading
on the New York Mercantile Exchange (NYMEX).

During the previous session, the futures contract
fell by $1.42, or 1.7 percent to $83.94 per barrel.

Analysts say the strong dollar rally,

rising bond yields and concerns about
demand under the global economic
slowdown are putting pressure on oil prices again,
and the market expects interest rate hikes this week from the Fed,
the Bank of England and the Swiss National Bank.

The Federal Reserve meeting will end Wednesday evening,
and analysts generally believe that as a result,
the prime US interest rate will be increased by at least 75 basis points.

In the meantime, data from the American Petroleum Institute
(API) indicated that US oil stocks rose by 1 million barrels last week
after rising by 6 million barrels the previous week.

The official inventory report from the US Department
of Energy will be released later on Wednesday.

Asian stocks tumble as markets brace for strong Fed rally

Japan’s Nikkei 225 index fell by 1.26 percent,
approaching a two-week low,
the Australian stock index fell by 1.35 percent
and South Korea’s Kospi fell by 0.9 percent.

Chinese blue chips fell by 0.82 percent,
while Hong Kong’s Hang Seng index fell by 1.26 percent.

MSCI’s broadest index of Asia-Pacific stocks fell by 1 percent,
following an overnight Wall Street sell-off that
weakened the S&P 500 by 1.13 percent,
although futures indicated a slightly higher opening on Wednesday.

Markets are pricing in an 81 percent chance of another 75 basis point increase,
and see a 19 percent probability of a full percentage point rise.

The US stock market ended trading in the red zone in anticipation of the Fed’s decision

US stock indices ended their trading on Tuesday in the red zone,
and traders took a cautious stance in anticipation of Fed decisions.

Most experts are confident that the US central bank will raise
its base rate by 75 basis points after the meeting that will end on Sept. 21.

Some consider it possible for the Fed to
raise the rate by 100 basis points at once,
and given futures prices for the price level,
the market estimates this probability at 20 percent.

In addition to the Fed’s own decision,
traders will carefully assess the central bank’s
expectations regarding the future price level.

In June, all Fed leaders were confident that
the rate would be at least 3 percent by the end of this year,
with the average forecast rising to 3.4 percent.

Dollar Rises as Investors Brace for Federal Reserve decision

The dollar approached a peak of two decades against a basket of currencies on Wednesday,
after U.S. Treasury yields jumped ahead of the Federal Reserve’s
decision to raise expected interest rates.

The United States dollar index,

which measures the greenback against a basket of currencies,
rose by 0.1 percent to 110.27, extending its gain by 0.6 percent overnight
and staying off the 20-year high of 110.79 this month.

Yields on two-year United States Treasury bonds,
a rough measure of interest rate expectations,
reached 3.992 percent overnight, the highest level since 2007,
while those on the United States’ 10-year Treasury rose to 3.604 percent,
the highest since 2011.

Sterling traded last at $1.13705, sitting near a 37-year low of $1.1351.

The euro fell by 0.05 percent at $0.9964,
narrowly extending from an overnight decline of 0.56 percent.

In the meantime,

the Australian dollar reached a low of $0.6666,
the lowest since June 2020,
while the New Zealand dollar fell to $0.5885,
the lowest since April 2020.

The Bank of England and the Bank of Japan

will announce policy decisions on Thursday,
with markets divided over the size of the rate hike by the first bank,
while policymakers in Japan are expected to stand idly by.

Data released on Tuesday showed Japan’s core consumer inflation
accelerated to 2.8 percent during August,
hitting its fastest annual pace in nearly eight years and
exceeding the central bank’s target of 2 percent for the fifth consecutive month.

The yen fell by about 20 percent against the dollar this year,
about 0.1 percent to 143.83 per dollar,
not far from its 24-year low of 144.99.

artical name Oil climbs slightly as US dollar index rises

Oil climbs slightly as US dollar index rises

Related Topics