Euro rose in European trade on Wednesday against a basket of major rivals, extending gains for the fifth straight session against the dollar and trading above $1.1 for the first time in three months as concerns fade about the widening interest rate gap between Europe and the US.

Now investors await European inflation data for November to gauge the likely path ahead for the ECB monetary policies. 

EUR/USD

EUR/USD rose 0.25% to 1.1017, the highest since August 11, with a session-low at 1.0990, after closing up 0.4% yesterday, the fourth profit in a row following bearish remarks by Federal Reserve officials. 

Fed member Christopher Waller, a usual hawk, said the Fed is on track to bring inflation back to the 2% target.

Such remarks bolstered the case for an early interest rate cut by the Federal Reserve next year, reducing the interest rate gap with the European Central Bank.

Interest Rate Gap

The current US-European interest rate gap stands at 100 basis points, the lowest since May 2022, and it's expected to shrink further in the first half of 2024.

Most European Central Bank officials ruled out early interest rate cuts in 2024 amid efforts to maintain tight monetary conditions throughout 2024. 

European Inflation Data

Later today, consumer prices data in Germany and Spain will be released, paving the way for euro zone inflation data tomorrow. 

ECB President Christine Lagarde repeatedly asserted the importance of data in determining the path ahead for European monetary policies, as the central bank aims at 2% inflation rates. 

Palladium prices declined on Tuesday even as the dollar lost ground against most major rivals, however, palladium was pressured by profit-taking following recent gains. 

Dollar declined today following weak US new home sales data, with traders now betting on an early Federal Reserve interest rate cut in the first half of the year. 

Palladium was pressured by demand concerns as the real estate market continues to suffer in China, sapping demand momentum on industrial metals. 

Recent data showed profits by Chinese industrial corporations grew much slower than expected in October. 

At the London Metals Exchange, aluminium rose 0.5% to $2222 a tonne, while tin rose 1% to $23195, as zinc rose 0.3% to $2547, while lead rose 0.8% to $2180, as nickel fell 0.1% to $16060. 

Otherwise, the dollar index fell 0.3% to 102.8 as of 18:12 GMT, with a session-high at 103.3, and a low at 102.6. 

Palladium March futures fell 0.7% in American trade to $1,065.5 an ounce. 

Global oil prices rose in European trade on Tuesday on track for the first profit in five days amid expectations OPEC+ will extend and deepen current production cuts. 

Traders also await initial data on US crude stocks from the American Petroleum Institute later today, expected to show a buildup for the fifth week in a row. 

Global Oil Prices

US crude rose 1.1% to $75.86 a barrel, with a session-low at $74.75, while Brent added 1.1% to $80.86 a barrel.

US crude lost 0.25% on Monday, while Brent shed 0.2%, the fourth loss in a row on US demand concerns. 

OPEC+ 

OPEC+ is holding a meeting this week to discuss production policies and allot specified output cuts in 2024. 

The meeting was delayed for four days as some producers oppose deeper production cuts next year. 

Saudi Arabia and Russia are both trying to convince opposing states on the necessity of new production cuts to support prices and achieve more balance in the market.

US Stocks 

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

Global oil prices are waiting for an important meeting by OPEC+ this week to discuss production policies and allot specified output cuts in 2024. 

The meeting was delayed for four days as some producers oppose deeper production cuts next year. 

Saudi Arabia and Russia are both trying to convince opposing countries on the necessity of new production cuts to support prices and achieve more balance in the market.

In another potentially negative sign for the next meeting, global hedge funds cut down their expectations of oil prices considerably. 

According Ace Futures Europe Exchange data, net purchases positions for Brent and US crude tumbled by 19,378 contracts to 232,883 contracts last week, a June low. 

Global oil prices fell 15% since September, plumbing four-month lows, as traders await the crucial OPEC+ meeting. 

It'll depend now on whether OPEC+ will indeed carry through with fresh production cuts, extending into 2024. 

Reports indicate that Russia and Saudi Arabia asked members to cut their shares of output to support the markets, but some members are disagreeing. 

Saudi Arabia is expected to extend its voluntary production cuts to next year, amounting to a million bpd. 

Reuters reported that the group is now near a compromise for a new production policy for 2024.