Nickel prices declined on Wednesday as the dollar maintained strength against most major rivals while the US debt ceiling crisis progresses.

Debt Ceiling

White House and Congressional officials will meet later today to further negotiate after the failure of the previous talks to reach a compromise on raising the debt ceiling. 

US President Joe Biden will extend talks with Congressional leaders later this week in a race to a catastrophic default on debt next week. 

Many sticking points remain between both sides, with US Treasury Secretary Janet Yellen reiterating warnings from a potential default on payments next June, which would threaten the credit rating for the US and tip the economy into recession. 

Fed Meeting

Investors additionally await the Federal Reserve's meeting minutes later today to better gauge the path forward for monetary policy in the US.

Otherwise, the dollar index rose 0.2% as of 15:19 GMT to 103.7, with a session-high at 103.7, and a low at 103.3. 

Dollar's strength is weighing on most commodities and minerals and leading to a considerable decline.

Nickel spot prices tumbled 1.2% as of 15:30 GMT to $20.5 thousand a tone. 

Sterling rose in European trade away from four-week lows against dollar, on track for the first profit in three days following strong UK inflation data. 

Such data bolstered the the case for another rate hike by Bank of England next month to combat stubborn inflation, with increased speculation about yet an additional rate hike in July as well.

GBP/USD rose 0.5% to 1.2470, with a session-low at 1.2411, after closing down 0.2% yesterday, the second loss in a row, plumbing four-week lows at 1.2373 as dollar strengthened against major rivals, and following weak UK data.

UK Inflation Data

UK consumer prices rose 8.7% in April, passing estimates of a 8.2% increase, while down from 10.1% in March. 

Core consumer prices rose 6.8% in April, passing estimates of 6.2%, and up from 6.2% in March.

Bank of England

Such data showed that inflationary pressures remain strong on Bank of England's policymakers, and shows the need for further increases in interest rates.

Bank of England Governor Andrew Bailey said there might be a need for further increases in UK interest rates if inflation remained high.

UK Interest Rates

Markets are fully pricing in a 0.25% rate hike by BoE in June, with another likely 0.25% rate hike in July. 

‏Gold prices declined on Tuesday even as dollar strengthened against most major rivals as the US  debt ceiling talks progress.

The Crisis Continues

Optimism is also growing about US debt ceiling talks following fruitful talks between US President Joe Biden and top Congressional Republican leader Kevin McCarthy.

However, both sides  didn't reach a compromise on the debt ceiling crisis, although negotiations are still ongoing and progressing to avoid a catastrophic default.

It's a must that both sides reach a deal to raise the debt ceiling before the end of this week, but sticking points remain.

Mixed Data

Investors await the Federal Reserve's meeting minutes on Wednesday to assess upcoming policy moves by the central banks.

Earlier US data showed new home sales rose 4.1% in April to 683 thousand units from 665 thousand units in March. 

US services PMI rose to 55.1 in May, while analysts expected a drop to 52.6 from 53.6. 

Conversely, US manufacturing PMI fell to 48.5 in May from 50.2 in the previous reading.

The dollar index thus rose 0.3% as of 18:57 GMT to 103.4, with a session-high at 103.6, and a low at 103.1. 

Gold prices stabilized at $1,976.5 an ounce as of 18:58 GMT.

Oil prices rose in European trade for the second straight day amid growing fears about  a supply deficit in the second half of the year. 

Optimism is also growing about US debt ceiling talks following fruitful talks between US President Joe Biden and top Congressional Republican leader Kevin McCarthy.

Global Prices

US crude rose 1.5% to $73.11 a barrel, with a session-low at $71.76, while Brent added 1.25% to $77.01 a barrel.

US crude rose 0.4% on Monday, while Brent added 0.1%, the first profit in three days. 

The IEA

The EIA warned in its last monthly meeting of an upcoming shortage that might occur in the second half of the year, with demand expected to surpass supplies by nearly 2 million bpd.

The increase is mainly fuelled by improving Chinese demand, in addition to steep output cuts by OPEC+. 

US Demand

US demand is also improving as seasonal demand grows on gasoline starting next week in the US. 

US Debt Ceiling Talks 

US President Joe Biden and top Congressional Republican Kevin McCarthy didn't reach a compromise on the debt ceiling crisis, however negotiations are still ongoing and progressing to avoid a catastrophic default.

American Petroleum Institue

Later today, the American Petroleum Institute will release data on US crude stocks, expected to show an increase for the third week in a row.