Oil was on its longest run of gains in nine months as major economies eased coronavirus-led restrictions in an attempt to revive economic activity.
Oil prices soared higher on hopes for a recovery in vehicle traffic and fuel demand. Some major economies in Europe and Asia along with several U.S. states began to ease lockdown measures.
Italy was among countries tentatively easing coronavirus lockdowns to revive economies as global deaths surpassed a quarter of a million.
U.S. President Trump praised the rise in oil prices and hailed measures by the states to reopen their economies. This was a reversal from anger he has frequently mooted throughout the pandemic era. It was not long ago when he threatened tariffs on Beijing, to punish China for its alleged failure to contain the coronavirus.
The blame game over the coronavirus pandemic is feeding tensions between the US and China, and that’s bound to affect the global economy. President Trump sent stocks dipping yesterday after he implied he may punish China with more tariffs over its handling of Covid-19.
But oil prices staged a recovery reflecting hopes that the oil industry may have passed the worst.
Still, global oil demand and prices suffered historic losses in April. Further, recovery is likely to be slow with air traffic not expected to rebound any time soon.
START TRADINGForex – Major economies reopening lifts oil
Public holidays in Japan and China lightened trade. Commodity currencies advanced as oil prices bounced.
The U.S. dollar edged higher for a second consecutive day. The dollar index edged up 0.1% to 99.55, and was not far away from a near two-week high of 100.83 in late April.
The Canadian dollar strengthened against the US dollar as the easing of coronavirus lockdowns in some countries boosted oil prices. Domestic data showed that the trade deficit widened less than expected in March.
The currency, which has been pressured in recent days by fears that last year’s U.S.-China trade dispute, was trading 0.4% higher at 1.4033 to the greenback.
The Swiss franc weakened more than half a percent against the U.S. dollar on Tuesday. A German constitutional court ruled that the Bundesbank must stop buying government bonds if the ECB cannot prove those purchases are needed.
The court challenge sent the euro falling by 0.7% against the U.S. dollar and 0.6% versus the Japanese yen.
The Australian dollar gained thanks to the bounce in oil prices. The Aussie inched up more than 64 cents to $0.6454 after the RBA left its targets for the cash rate unchanged at 0.25%
Sterling gained on Tuesday as demand eased for U.S. dollars, allowing the pound to recover some of its 1.5% loss this month.
The pound was up 0.4% against the dollar at $1.2455. Against the euro, it was 0.3% higher at 87.40 pence.
WTI crude futures were up 18.1%, or $3.68, at $24.07 per barrel at 1400 GMT. The U.S. benchmark has closed higher for the last four sessions. Brent crude futures were up 11.4%, or $3.11, at $30.31.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money