Oil prices hover near two-month lows on Chinese demand concerns
Oil prices fell in European trade on Monday for the fourth straight session, almost hitting two-month lows as Chinese demand weakens amid mounting Covid 19 infections in major cities.
A surge in dollar against major currencies also pressured dollar-denominated oil futures as they become costlier to holders of other currencies.
Global Oil Prices
US crude fell 1.25% to $79.14 a barrel, while Brent shed over 1.4% to $86.45 a barrel, with a session-high at $87.94.
US crude lost 2.3% on Friday, hitting two-month lows at $77.24 a barrel, while Brent tumbled 2.5% to $85.84 a barrel, the lowest since September 30.
Global oil prices lost 9% on average last week, the second weekly loss in a row, and the largest since late March on global demand concerns.
Chinese Demand
Covid 19 infections in China continue to rise in major cities including Beijing, with movement restrictions getting reinstated once more.
Even as Covid 19 infections in China remain small compared to the rest of the world, the Chinese government continue to take a very strict approach against it.
Chinese government said a few weeks ago it won't budge on its zero tolerance policy for Covid 19 as infections reach six-month high.
The Dollar
The dollar rose 0.9% today on track for the third profit in a row, hitting two-week highs at 107.90 against a basket of major rivals.
The gains came following a batch of bullish statements from Fed officials, which bolstered the case once more for a 0.75% rate hike in December.
Dollar extends gains to two-week high after Fed statements
Dollar rose in European trade against a basket of major rivals for the third straight session, hitting two-week highs.
The gains came following a batch of bullish statements from Fed officials, which bolstered the case once more for a 0.75% rate hike in December.
The Index
The dollar index rose 0.9% to 107.90, the highest since November 11, after closing up 0.3% on Friday, the second profit in a row as US 10-year treasury yields rebound.
The dollar index rose 0.5% last week away from three-month lows at 105.34 on short-covering.
Bullish Remarks
Fed member Christopher Walrer said yesterday that the Fed will keep on its fight against inflation until it's completely brought down to just 2%.
Saint Louis Fed President James Bullard said the current trajectory of inflation requires raising interest rates to 5% at least, with some strict estimates pushing rates to above 7%.
Fed Rates
Chances of a 0.75% rate hike by the Fed in December rose from 15% to 25% in betting markets, while chances of a 0.5% rate hike fell from 85% to 75%.
Gold declines to two-week lows after Fed's statements
Gold prices fell in European trade, sharpening the decline for the fourth straight session away from three-month highs, and plumbing two-week lows as the dollar powers up against major rivals.
Dollar's gains came after a batch of bullish statements from Fed officials, which bolstered the case once more for a 0.75% rate hike in December.
Gold Prices Today
Gold prices fell 0.6% to $1,740 an ounce, the lowest since November 10, after losing 0.5% on Friday, the third loss in a row on profit-taking off three-month highs at $1,786.
Gold lost 1.1% last week, the first weekly loss in three weeks, as the dollar rebounded against a basket of major rivals.
The Dollar
The dollar index rose over 0.6% today for the third straight session, hitting two-week highs at 107.63 against a basket of major rivals.
Such gains came after bullish remarks by Fed officials, which raised chances once more of a 0.75% rate hike in December.
Fed Remarks
Fed member Christopher Walrer said yesterday that the Fed will keep on its fight against inflation until it's completely brought down to just 2%.
Saint Louis Fed President James Bullard said the current trajectory of inflation requires raising interest rates to 5% at least, with some strict estimates pushing rates to above 7%.
Fed Rates
Chances of a 0.75% rate hike by the Fed in December rose from 15% to 25% in betting markets, while chances of a 0.5% rate hike fell from 85% to 75%.
The SPDR
Gold holdings at the SPDR Gold Trust fell on Friday by 1.73 tones to a total of 904.62 tones.
Euro sharpens decline to two-week low amid grim outlook
Euro fell in European trade against dollar for third straight session, hitting two-week lows amid grim outlook for European services and manufacturing, which could hinder the ECB's policy tightening plans
The dollar extended its gains following recent remarks by Fed officials, which confirms the ECB will carry on its battle against inflation in the US.
EUR/USD fell 0.7% fell 1.0252, the lowest since November 11, after losing 0.4% on Friday, the second loss in a row as two-year German treasury yields slowed down.
Euro fell 0.3% last week against dollar on profit-taking away from four-month highs at 1.0481.
Grim Outlook
Europe's manufacturing PMI data are expected later today to show a slowdown in activities in November.
The data is expected to bring down bets on the European Central Bank's expected rate hikes at upcoming meetings.
The Dollar
The dollar index rose 0.6% on Monday on track for the third profit in a row, hitting two-week highs at 107.59 against a basket of major rivals.
Recent US data showed retail sales rose past estimates in October, while Fed officials such as San Francisco Fed President Mary Dale said it's reasonable the Fed will raise rates to 5.25% by early next year.