Oil prices fell on Thursday after gains in the previous session, pressured by expectations of weaker US fuel demand as the summer driving season draws to a close, along with the resumption of Russian supplies to Hungary and Slovakia via the Druzhba pipeline.

Crude had risen on Wednesday after official data showed US inventories fell by 2.4 million barrels in the week ending August 22, compared with analysts’ expectations in a Reuters poll for a 1.9 million barrel drop, a sign of strong demand.

However, market participants noted that the upcoming US Labor Day holiday next week marks the unofficial end of the summer driving season, signaling a decline in gasoline demand.

Brent crude futures fell 28 cents, or 0.4%, to 67.77 dollars a barrel at 10:33 GMT, while US West Texas Intermediate (WTI) futures slipped 21 cents, or 0.3%, to 63.94 dollars.

John Evans of oil brokerage PVM said: “The US bank holiday this week marks the end of the driving season, and gasoline has hardly been the cure-all for demand. Any short-term reasons for optimism on oil prices are fading,” pointing to the resumption of Druzhba flows.

Hungarian oil company MOL and Slovakia’s economy minister said Thursday that Russian crude supplies to Hungary and Slovakia via the Druzhba pipeline had resumed after being disrupted by a Ukrainian attack inside Russia last week.

Traders are also watching how New Delhi responds to Washington’s pressure to halt Russian oil purchases, after US President Donald Trump doubled tariffs on Indian imports to 50% on Wednesday.

Tony Sycamore, analyst at IG Markets, said: “India is expected to continue buying Russian crude at least in the near term, which may limit the impact of the new tariffs on global supply.”

Developments in the Russia-Ukraine conflict offered some support to prices, as both Moscow and Kyiv intensified attacks on each other’s energy infrastructure.

Russia launched a massive drone strike on energy and gas transport facilities across six Ukrainian regions late Tuesday into Wednesday, cutting power to more than 100,000 people, according to Ukrainian officials.

The US dollar was little changed on Thursday as traders increased bets on a Federal Reserve rate cut next month, after New York Fed President John Williams suggested that a reduction was possible.

The greenback came under renewed pressure from President Donald Trump’s escalating push to exert greater influence over monetary policy decisions, amid his attempts to remove Fed board member Lisa Cook and replace her with an ally.

The dollar held steady against the euro, even after France’s prime minister unexpectedly announced on Monday a confidence vote next month that could bring down his fragile government.

Williams told CNBC on Wednesday that interest rates were likely to come down at some point, but policymakers needed to watch incoming data to determine whether a cut would be appropriate at the September 16–17 meeting.

Among the key releases due before that meeting are Friday’s Personal Consumption Expenditures (PCE) price index—the Fed’s preferred inflation gauge—followed by the monthly jobs report a week later.

Markets are currently pricing an 89% chance of a 25-basis-point cut next month, with cumulative easing of 55 basis points by year-end already factored in, according to LSEG data.

This has pushed two-year Treasury yields—sensitive to monetary policy expectations—to their lowest since May 1, adding to pressure on the dollar.

Trump’s efforts to install carefully chosen dovish candidates on the Fed’s decision-making committee also weighed on short-term yields, though his move against Cook could spark a protracted legal battle after she filed a lawsuit to remain in her post.

Chris Turner, head of global markets at ING, said: “Short-dated US yields remain close to recent lows, and most analysts would conclude that this week’s attempt by President Trump to remove Lisa Cook has been a negative factor for the dollar.”

The dollar index, which measures the greenback against six major peers, rose 0.1% to 98.225 after two straight days of declines.

The euro was little changed, down 0.07% at 1.1630 dollars.

Against the yen, the dollar slipped 0.03% to 147.34.

In another development, Japan’s chief trade negotiator Ryusei Akazawa canceled a trip to Washington at the last minute on Thursday, delaying the announcement of details of a 550 billion dollar Japanese investment pledge in the US tied to a tariff agreement.

A government spokesman said the decision came after talks with the US side revealed “administrative-level” issues that required further discussion.

The dollar also fell to its lowest level against the offshore Chinese yuan since November, down 0.2% at 7.1360 in offshore trade.

Gold prices rose in the European market on Thursday, extending gains for a third straight session and trading above the 3,400-dollar mark per ounce for the first time in two weeks, supported by continued weakness in the US dollar against a basket of global currencies.

Less aggressive comments from some Federal Reserve officials have boosted expectations of a US rate cut in September. To reprice those odds, investors later today await key US economic data.

Price Overview

Gold prices rose 0.15% to 3,401.52 dollars, the highest since August 11, from the opening level of 3,397.17 dollars, after touching a low of 3,384.65 dollars.

On Wednesday, gold settled 0.15% higher, its second consecutive daily gain.

US Dollar

The dollar index fell about 0.15% on Thursday, extending losses for a third session, reflecting continued weakness in the greenback against a basket of major and minor currencies.

The decline came as the US 10-year Treasury yield dropped to a two-week low, with traders increasing bets on a Fed rate cut next month.

US Interest Rates

Federal Reserve member John Williams said the September meeting would be “open” to a rate cut decision. He added: “The risks are more balanced—we just have to wait and see how the data evolves.”

According to CME’s FedWatch tool, market pricing currently assigns an 87% probability of a 25-basis-point rate cut in September, with 13% odds of no change. For October, markets see a 94% chance of a quarter-point cut and only 6% odds of no change.

To reprice those expectations, investors later today await key US data, including second-quarter GDP and weekly jobless claims.

Outlook for Gold

Kyle Rodda, market analyst at Capital.com, said: “There is strong interest in gold due to these institutional trust issues and risks surrounding Fed independence.”

He added: “But we are waiting for a stronger driver to push prices firmly beyond the critical 3,400-dollar level. The US PCE inflation data will be extremely important. We remain optimistic on gold, and I believe all the fundamentals are moving in the right direction.”

SPDR Gold Trust

Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 2.58 metric tons on Wednesday, marking a third consecutive daily increase, bringing total holdings to 962.50 metric tons, the highest since August 15.

The Swiss franc rose in the European market on Thursday against a basket of global currencies, extending gains for a third consecutive session against the US dollar, supported by weakness in the greenback as bets increased on a Federal Reserve rate cut in September.

Renewed global inflation pressures are weighing on policymakers at the Swiss National Bank, reducing the likelihood of a rate cut in September. To reprice those odds, investors are awaiting Switzerland’s second-quarter GDP figures due later today.

Price Overview

The US dollar fell 0.2% against the Swiss franc to 0.8004, from the opening level of 0.8020, recording a high of 0.8026.

The franc ended Wednesday up about 0.15% against the dollar, its second consecutive daily gain.

US Dollar

The dollar index fell by about 0.15% on Thursday, extending losses for a third straight session, reflecting continued weakness of the greenback against a basket of major and minor currencies.

The decline came as the US 10-year Treasury yield dropped to a two-week low, with traders increasingly pricing in a Fed rate cut next month.

Federal Reserve member John Williams noted that the September meeting would be “open” to a rate cut decision. Williams said: “The risks are more balanced—we just have to wait and see how the data evolves.”

Traders currently price about an 87% probability of a 25-basis-point Fed cut next month, with cumulative easing of 56 basis points expected by year-end.

Swiss Interest Rates

Recent data from Europe, the UK, and the US showed renewed inflationary pressures, suggesting inflation in Switzerland may also pick up again, which could delay further monetary easing by the Swiss National Bank.

Market pricing currently places the odds of a Swiss rate cut in September below 20%.

Swiss Economy

To reprice these expectations, investors are awaiting Switzerland’s Q2 GDP data due later today, with forecasts pointing to 0.1% growth versus 0.5% in Q1.

Outlook for the Swiss Franc

At Economies.com, we expect the franc to continue strengthening against the US dollar if Swiss GDP data come in better than market forecasts.