Euro backs off nine-month high on profit-taking
Euro fell in European trade on Friday against dollar for a second session off nine-month highs on profit-taking.
Euro is heading for the third weekly profit in a row on prospects of a 0.5% rate hike by the ECB at both the February and March meetings.
EUR/USD fell 0.25% to 1.0865, with a session-high at 1.0900, after falling 0.2% yesterday, the first loss in seven days on profit-taking away from nine-month highs at 1.0929.
Dollar also rebounded from multi-month lows after positive US data, which bolstered the case for multiple more rate hikes.
Euro is up 0.25% so far this week against dollar on track for the third weekly profit in a row.
ECB
ECB President Christine Lagarde said recently that inflation remains too high and the bank is committed to continuously increase interest rates until inflation is brought back to 2%.
Lagarde once again repeated the use of the phrase "staying the course" when talking about interest rate decisions at upcoming meetings, meaning the current pace will be maintained at least until the second quarter of the year.
Other ECB members strongly hinted at multiple 0.5% rate hikes in both February and March.
The Dollar
The dollar index rose 0.2% on Friday for the second session off eight-month lows at 101.50 against a basket of major rivals.
Recent data showed US economy grew in the fourth quarter more than expected, while unemployment claims hit nine-month lows.
Estimates
Despite euro's current decline, analysts still expect euro to gain ground above $1.1 in the short term, as the ECB prepares to increase interest rates by double the Fed's rate in February.
Wall Street climbs after positive data
US stock indices climbed on Thursday after strong data that showed continued growth in the world's largest economy.
US economy grew 2.9% in the fourth quarter of 2022, beating estimates of 2.6%, while up from 3.2% in the third quarter.
US durable goods orders rose 5.6% in November, beating estimates of 2.4%, and improving from October's 2.1% decline.
US unemployment claims tumbled to 181 thousand in the week ending January 21, the slowest since last April, and below estimates of 203 thousand, while also down from 192 thousand in the previous reading.
Such data indicate the strength and vitality of the economy, which is reflected in recent statements by the IMF expecting the US recession to avoid recession this year.
Dow Jones rose 0.3%, or 100 points as of 15:34 GMT to 33,844, while S&P 500 rose 0.7%, or 26 points to 4,043, as NASDAQ added 1.1%, or 130 points to 11,442.
Copper edges up under dollar's pressure and after strong data
Copper prices rose mildly on Thursday as dollar strengthened against most major rivals and amid optimism after strong US growth data.
US economy grew 2.9% in the fourth quarter of 2022, beating estimates of 2.6%, while up from 3.2% in the third quarter.
US durable goods orders rose 5.6% in November, beating estimates of 2.4%, and improving from October's 2.1% decline.
US unemployment claims tumbled to 181 thousand in the week ending January 21, the slowest since last April, and below estimates of 203 thousand, while also down from 192 thousand in the previous reading.
Such data indicate the strength and vitality of the economy, which is reflected in recent statements by the IMF expecting the US recession to avoid recession this year.
The dollar index rose 0.2% to 101.8 as of 15:20 GMT, with a session-high at 101.9, and a low at 101.5.
Copper futures due in March rose 0.1% to $4.24 a pound as of 15:18 GMT.
Oil prices rise over 1.5% on Chinese demand hopes
Oil prices rose over 1.5% in European trade on Thursday, resuming gains after a two-day decline on profit-taking, amid current hopes for improving demand in China.
In addition, major producers are considering another output cut ahead of the OPEC + meeting next week.
Global Prices
US crude rose 1.8%% to $81.69 a barrel, while Brent rose 1.7% to $87.66 a barrel.
Global oil prices fell in the last two days on profit-taking off multi-week highs, with US crude moving off seven-month highs, while Brent moved off eight-month highs.
Chinese Demand
The International Energy Agency said that lifting Covid 19 restrictions in China is expected to increase global demand to record highs this year.
Analysts already pointed to a 22% jump in road traffic in China so far this month compared to last year.
OPEC +
Reuters reported that countries in OPEC + are discussing another supplies cut a week before their meeting in Vienna.
US Inventories
The Energy Information Administration reported a buildup of 500 thousand barrels in US crude stocks to 448.5 million barrels last week, while analysts expected a build of 1.2 million barrels.
Gasoline stocks rose 1.8 million barrels to 232 million barrels, while distillate stocks fell 0.5 million barrels to 115.3 million barrels.