Euro fell in European trade for another session against dollar off six-month highs on profit-taking. 

Dollar was boosted after strong US services data for November, which boosted bets for a 0.75% rate hike next week. 

EUR/USD fell 0.15% to 1.0475, with a session-high at 1.0518, after closing down 0.5% yesterday, the first loss in four days on profit-taking off six-month highs at 1.0595. 

Euro rose 1.4% last week, the second weekly profit in a row against dollar as concerns about a widening policy gap between the US and Europe fade. 

The Dollar

The dollar index rose 0.3% on Tuesday for the second session off six-month lows at 104.11 against a basket of major rivals. 

Recent US data showed US services PMI rose unexpectedly last month, showing the services sector remains vibrant. 

Such data raised chances of a 0.75% rate hike by the Federal Reserve from 18% to 22% next week. 

Dollar fell in European trade for the fourth straight session, hitting six-month lows amid a strong selloff wave. 

Demand on copper declined since Fed Chair Jerome Powell's last bearish speech, which bolstered the case for a 0.5% rate hike only in December. 

Dollar suffered as well, as risk appetite improved in the markets after Chinese cities eased Covid 19 restrictions. 

The Index

The dollar index fell 0.4% to 104.11, the lowest since June, with a session-high at 104.76, after closing down 0.2% on Friday, the third loss in a row. 

The dollar index is down 1.5% so far this week, the second weekly loss in a row following bearish remarks by Fed Chair Jerome Powell. . 

Jerome Powell 

Fed Chair Jerome Powell struck a much more bearish chord in recent statements, noting the Fed will slow down its pace of policy tightening in upcoming meetings.

After such statements, chances of a 0.50% rate hike by the Fed rose from 67.5% to 80%, then 82% now, while chances of a 0.75% rate hike fell from 32.5% to 18% currently.

Chinese Developments

Chinese cities started easing Covid 19 restrictions this week, boosting confidence in the economy.

China's economy was hammered recently by the strict zero tolerance policies which hampered trade and consumption, and led to rare protests.

Data

Investors await important US data on the services sector, which might provide important clues on the health of the world's largest economy in the fourth quarter. 

US ISM services PMI is expected down to 53.5 in November from 54.4 in October. 

OPEC+ alliance decided on Sunday to maintain its current production targets unchanged due to weaker global economic outlook.

The global alliance's decision was expected amid important developments in the market that will impact the demand and supply balance. 

The EU decided to ban Russian oil imports through sea, starting December 5, while European governments put price ceiling of $60 a barrel on Russian crude, while Chinese cities ease restrictions due to Covid 19. 

OPEC+

The oil cartel and allies agreed this week to maintain current output policies unchanged, with a previous cut of 2 million bpd ongoing. 

Members asserted their readiness to intervene any time if required and take immediate measures to support the market.

Bloomberg reported that the reasons behind the decision is the state of uncertainty in global markets due to uncertainty about Russian supplies and Chinese demand. 

European Ban

Starting today, the EU started to ban Russian oil imports through sea amid a batch of sanctions imposed on the Kremlin for invading Ukraine. 

The International Energy Agency warned that such a ban will put more pressure on the oil market, especially diesel markets which are already very taxed. 

Price Ceiling

The EU put a price cap of $60 a barrel on Russian oil prices after prolonged discussions and doubts about the effectiveness of such a move. 

The EU is thus joining  Britain, the US, and Australia in executing the price ceiling. 

Chinese Demand

Hopes are improving as China eases Covid 19 restrictions and opens up the economy one more.

The economy was hurt by the zero tolerance policy by the Chinese government, which promoted surprising protests in major cities. 

Gold prices rallied in European trade to five-month highs, resuming gains after a hiatus, as the dollar loses ground against a basket of major rivals. 

Dollar fell to six-month lows against major rivals following bearish remarks by Fed Chair Jerome Powell and as risk appetite improved as Chinese cities lessen Covid 19 restrictions. 

Prices Today

Gold prices rose 0.7% to $1,810 an ounce, the highest since July 5, after losing 0.3% on Friday, the first loss in three days after a stream of strong gains. 

Gold gained 2.4% last week, the second weekly profit in a row as the dollar weakened. 

The Greenback 

The dollar index fell 0.4% on Monday, deepening losses for the fourth straight session and plumbing six-month low at 104.11 against a basket of major rivals.

Fed Chair Jerome Powell struck a much more bearish chord in recent statements, noting the Fed will slow down its pace of policy tightening in upcoming meetings.

After such statements, chances of a 0.50% rate hike by the Fed rose from 67.5% to 80%, then 82% now, while chances of a 0.75% rate hike fell from 32.5% to 18% currently.

Chinese Developments

Chinese cities started easing Covid 19 restrictions this week, boosting confidence in the economy. 

China's economy was hammered recently by the strict zero tolerance policies which hampered trade and consumption, and led to rare protests. 

The SPDR

Gold holdings at the SPDR Gold Trust fell 1.15 tones on Friday, the second decline in a row to a total of 905.49 tones, the lowest since November 18.