The US dollar fell against most major rivals on Monday as markets await the Federal Reserve’s meeting and policy decisions this week.
Fed officials are convening on Tuesday and Wednesday to decide on policies, with virtually all investors expecting the Fed to start a new policy easing cycle in order to boost economic growth and employment.
According to the Fedwatch tool, there’s a 63% chance of a 0.5% Fed rate cut this week, up sharply from 30% just a week ago, and with a 37% chance of a 0.25% rate cut.
On trading, the dollar index fell 0.4% as of 21:12 GMT to 100.6, with a session-high at 101.1, and a low at 100.5.
Aussie
The Australian dollar rallied 0.7% against its US counterpart as of 21:28 GMT to 0.6753.
Loonie
The Canadian dollar was mostly flat against its US counterpart at 21:28 GMT.
Gold prices stabilized on Monday even as the dollar fell against most major rivals ahead of the Federal Reserve’s policy meeting.
Fed officials are convening on Tuesday and Wednesday to decide on policies, with virtually all investors expecting the Fed to start a new policy easing cycle in order to boost economic growth and employment.
According to the Fedwatch tool, there’s a 63% chance of a 0.5% Fed rate cut this week, up sharply from 30% just a week ago, and with a 37% chance of a 0.25% rate cut.
Otherwise, the dollar index fell 0.4% as of 21:12 GMT to 100.6, with a session-high at 101.1, and a low at 100.5.
On trading, gold spot prices barely inched down as of 21:13 GMT to $2609.9 an ounce.
US stock indices were mixed on Monday as investors await the Federal Reserve’s meeting this week.
Fed officials are convening on Tuesday and Wednesday to decide on policies, with virtually all investors expecting the Fed to start a new policy easing cycle in order to boost economic growth and employment.
According to the Fedwatch tool, there’s a 63% chance of a 0.5% Fed rate cut this week, up sharply from 30% just a week ago, and with a 37% chance of a 0.25% rate cut.
On trading, Dow Jones rose 0.4% as of 16:09 GMT, or 152 points to 41,550, while S&P 500 fell 0.2%, or 11 points to 5614, as NASDAQ climbed 0.9%, or 168 points to 17,515.
- Production disruption in the Gulf of Mexico
- Another round of weak Chinese data
- Impending Fed rate cut this week
International benchmark Brent rallied in American trade on Monday to two-week highs, resuming its recovery from three-year lows as the dollar lost ground against most rivals.
The gains however were stymied by weak Chinese data on one hand, and boosted by the prospects of a 0.5% Fed rate cut this week on the other hand.
Prices
Brent rallied 1.7% today to $73.34 a barrel, the highest since September 6, with a session-low at $71.56.
Brent closed Friday down 0.2%, the first loss in three days, however near three-year lows at $68.71.
Global oil prices rose 1.25% on average last week, the first weekly profit in five days on active short-covering.
The Dollar
The dollar index fell 0.5% today on track for the third loss in a row, plumbing three-week lows at 100.58 against a basket of major rivals.
A weaker dollar boosts the greenback-denominated oil futures as they become cheaper to holders of other currencies.
Chinese Demand
Earlier Beijing government data showed industrial production fell to five-month lows in August, while both retail sales and new house sales weakened further.
Weak data has caused tanking market sentiment, as investors expect Chinese growth to brake even harder, in turn impacting oil demand.
Additionally, China's oil refineries production fell for the fifth straight month as fuel demand weakens and exports slow down.
US Rates
Investors are increasingly betting on a 0.5% Federal Reserve rate cut this week according to the Fedwatch tool.
Such an aggressive Fed rate cut would likely boost economic development and fuel demand, in turn underpinning oil prices.
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