Nickel tumbles over 3% as dollar gains ground

Nickel prices tumbled on Wednesday as the dollar muscled up against most major rivals, amid speculation about the Fed changing its policy tightening, in turn impacting dollar's performance and demand on commodities.

OPEC and the Fed

In a surprise move, OPEC and allies including Russia announced voluntary production cuts amounting to 1.65 million bpd starting May and until the end of the year.

The step came outside the usual timeline for the global alliance to review market conditions, which was supposed to happen today, Monday.

That cut adds to a previous cut agreed upon in October 2022 and amounting to 2 million bpd.

Such move is likely to force the Federal Reserve and other global central banks to move more aggressively with policy tightening to control inflation.

The Dollar

The dollar index rose 0.1% as of 14:39 GMT to 101.7, with a session-high at 102.1, and a low at 101.7. 

Dollar was recently boosted by expectations the Fed will hike interest rates in May to control inflation following OPEC+ decision to cut production and boost oil prices. 

A stronger dollar weighs on industrial and precious metals and makes them less attractive to investors. 

Nickel spot prices fell 3.3% as of 14:50 GMT to $22.1 thousand a tone.