Euro rose in European trade on Thursday against a basket of major rivals, maintaining gains for the second day against the dollar following bullish remarks from ECB officials.

Such remarks boosted the odds of another European interest rate hike and hurt chances of an early interest rate cut next year. 

EUR/USD

EUR/USD rose 0.1% to 1.0716, with a session-low at 1.0701, after rising 0.1% on Wednesday, the first profit in three days, resuming gains.

European Remarks

Irish Central Bank President said there's still a chance for another ECB interest rate hike, which the markets now don't expect at all.

German Central Bank President said the final stage of achieving the 2% inflation could be the hardest. 

Austrian Central Bank President said the ECB should remain cautious when it comes to inflation, and to be prepared for another interest rate hike if needed. 

Estimates

While many markets are betting on an early interest rate cut by the ECB next year, this is obviously far fetched now.

Analysts note that as inflation remains above targets, it's likely ECB policymakers will maintain tight monetary conditions for an extended duration. 

Palladium prices fell on Wednesday, extending losses to five-year lows, as the dollar rose against a basket of major rivals.

Palladium tumbled 40% so far this year, recently hitting five-year lows in November. 

A Reuters survey showed that analysts expect platinum and palladium prices to decline in 2024 as automotive production slows down.

Both metals are used in the car industry to reduce exhaust fumes, while platinum is additionally used in other industries and as a precious metal.

A Reuters survey expects the price to average $1,250 an ounce in 2024, down from $1,369 in previous surveys.

A dip in automotive production, especially in the US, hurt platinum and palladium demand.

Otherwise, the dollar index rose 0.15% as of 15:19 GMT to 105.6, with a session-high at 105.8, and a low at 105.5.

Palladium December futures declined 1.2% as of 15:20 GMT to $1,050 an ounce. 

‏Global oil prices fell on Wednesday on track for a second day of losses, plumbing four-month lows after a sharp buildup in US inventory stocks according to initial data.

Now traders await the official and final data from the Energy Information Administration later today.

Prices are also pressured by the stronger dollar and concerns about demand in China.

Global Prices

US crude fell 1.5% to $75.92 a barrel, the lowest since July 21, while Brent fell 1.4% to $80.27 a barrel, the lowest since July 21.

US crude fell 4.7% on Tuesday, while Brent declined 4.4%, marking the heftiest loss since October 4.

US Stocks

Initial data from the American Petroleum Institute showed US commercial crude stocks rose 12 million barrels in the week ending November 3, the second weekly increase in a row.

Thus total stocks rose to 444 million barrels, the highest since mid August.

Now traders await official EIA data on inventories, expected to show a buildup of 1.5 million barrels.

The Dollar

The dollar index rose 0.25% today on track for the third profit in a row against a basket of major rivals, pressuring dollar-denominated commodities. 

Such gains came following a spate of bullish remarks by Fed officials, which bolstered the case for another 0.25% interest rate hike next month.

Chinese Demand 

Recent official data showed Chinese imports contracted faster than expected in October, another sign of slower economic growth in the world's second largest fuel consumer.

The data also showed growth in China's crude exports, but such growth might not be sustained as demand is expected to taper off.

Traders expect refinery operations to slow down in China during November and December, which could hurt crude demand.

Dollar rose in European trade on Wednesday against a basket of major rivals, extending gains for the third straight session, following bullish remarks from Fed officials. 

Such remarks boosted the odds for another 0.25% interest rate hike next month, with investors now awaiting an important speech by Fed Chair Jerome Powell later today. 

The Index

the dollar index rose 0.3% to 105.87, with a session-low at 105.51, after closing up 0.25% yesterday away from two-month lows. 

Fed Remarks 

Minneapolis Fed President Neil Kashkari said the Fed might still have some work to do to control inflation.

US Rates

Following the remarks, odds for another US interest rate hike at the December meeting rose from 10% to 15%.

Fresh Remarks 

now eyes are all focused on Fed Chair Jerome Powell's speech today, which could carry clues on the likely path ahead for US policies.

The speech comes a week after the Federal Reserve's policy meeting last week, at which the Fed decided to hold interest rates unchanged.

Previous Remarks

Fed Chair Jerome Powell previously said the Open Market Committee remains committed to achieve the 2% inflation target, however the road to such a number will likely be long and difficult.

Powell asserted that borrowing rates need to remain high for an extended duration to impact inflation properly, dismissing speculation about an early interest rate cut.