The dollar reached its lowest level since 2.5 years against the euro on Wednesday, influenced by doubts about the possible rise in US interest rates this year by the Fed, as well as the scandal about the European Central Bank. The EURUSD pair reached the level of 1.1910, the highest level since January 2015. Unlike the dollar, which is under the pressure of political risks and uncertainty about the Federal Reserve’s monetary policy, the single currency has recently been backed by the expectation that the ECB will begin to end its current expansionary monetary policy.
The Fed president of St. Louis, James Bullard, said he was opposed to rising interest rates in the United States and warned that any upsurge would hinder the target inflation rate of 2% that the Fed wanted. Bullard’s comments backed skepticism over interest rates this year, analysts said. Expectations for a further increase this year last year were about 48%, announced CME Group’s FedWatch. While traders were awaiting the July report, eurozone economic data supported the view that the ECB is on its way to tightening its monetary policy, which is considered a highly favorable scenario for the euro. The dollar index, which measures the value of green money against a basket of six major currencies, last traded around 92.76 against a decline of 0.30%. Despite the poor performance against the euro, the dollar managed to record a slight yen growth, traded at around 110.53 yen per dollar.
Oil prices rose about 1% yesterday, as rising fuel demand in the US has overshadowed weaker data on light crude oil stocks that have shown that stocks have not fallen sharply. Stocks of light crude oil in the United States dropped 1.5 million barrels, which is twice as low as expected by analysts. However, the report also showed a record gas demand of 9.842 million barrels. Light crude finished the trading session on Wednesday with a 43 cents rise or 0.9 percent to 49.59 dollars a barrel after reaching a bottom of $ 48.55 a barrel earlier in the session. Brent crude oil last traded at 60 cents or 1.2 percent at about $ 52.38, reaching $ 51.18.
Gold retreated from the 7-week high on Wednesday after investors took home the winnings of the rallying rally at the start of the week. Equally important was the strong economic growth in Europe and the appreciation of US stock market shares that encouraged investment in risky assets. Spot Gold recorded a decline of 0.05% to 1267.68 dollars an ounce.
We recall that the precious metal reached $ 2773.97 an ounce on Tuesday, the highest level since June 14, and the price of precious metal in July was almost 6%. US futures ended in a trading session with a decline of 0.08% to $ 1,278.40 an ounce. ETF Securities strategist Martin Arnold explained that good European data gives a more optimistic view of gold and investors do not have to view gold as a hedge. He added that prices are unlikely to be moving much before Friday’s payrolls.