Euro got support from Bundesbank
Gold on the move again, this time to the upside
WTI still moving in a sideway market
The dollar continued to weaken following lingering concerns over a global trade war and uncertainty over US politics. It was down 0.5% versus the euro that found some grounding after comments from Bundesbank’s Weidmann that positive economic developments and inflation forecasts could allow the ECB to quickly end its bond purchases. Although the FOMC IR decision occurs this Wednesday, a .25% rate rise is basically already fully priced into the markets so investors will instead be watching for signs of hawkishness and will be eager to gauge whether Powell’s words lean to either three or four rates hike this year.
A softer dollar helped the Sterling move back above the $1.40, but to a greater extent, news that the UK and EU announced that they had agreed terms for a 21-month transition after Brexit provided ample fuel for traders longing cable.
Gold made sizeable gains today, up $4 to $1317/ounce. This fresh bull run comes amidst a softer greenback (DXY down 0.4%) and sinking equity markets with the S&P 500 down 1.9% providing fresh capital flows into Gold. Despite this recent move, price action remains choppy for the yellow metal as traders struggle to find a clear direction.
WTI Oil was a shade softer after rising sharply on Friday, however Brent did manage to secure some feeble gains. Bearish moves were seen in earlier sessions due to falling equities with the Dow Jones slipping 1.6%, and signs of rising supply with the US oil rig count rising back above 800. However, these factors were largely overshadowed by a softer dollar and tensions in the middle coupled with falling Venezuelan output presenting a risk to supply.