May 29, 2020

Losses for dollar, oil – Sterling up for third day

LQDFX Forex News Blog: Losses for dollar, oil – Sterling up for third day

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The dollar extended its losses on Thursday against its major traded rivals. Data showed domestic consumer prices grew less than analyst forecasts in September.

This slowdown reduced expectations inflation is accelerating despite a tightening labor market.

An index tracking the greenback versus six currencies was down 0.39% after touching its lowest level in two weeks.

Oil prices dropped to 2-week lows after the fall in the share markets worldwide. OPEC, in its monthly report, lowered its forecast of global demand growth for oil next year for a third straight month. As key consuming countries have troubles such as trade disputes and volatile emerging markets, the demand will drop. Further, U.S. crude inventories rose more than expected according to the American Petroleum Institute. Brent crude futures dropped by 1 dollar and 95 cents a barrel, at 81.90$ a barrel. U.S. crude futures dropped by 1 dollar and 54 cents a barrel from their last close.

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Losses for dollar, oil – Sterling up for third day

Sterling climbed to a new 3-month versus the greenback peak as EU summit approaches on Brexit deal hopes. There is wide optimism that Britain and the EU can reach a Brexit deal soon. However, concerns among investors about the Ireland border issue kept gains in check.

The pound has risen for three consecutive days on Wednesday. It was buoyed by comments from the EU’s Brexit negotiator Barnier suggesting a deal next week was imminent.

According to Times, 30 to 40 lawmakers from the opposition party would be prepared to back the Brexit deal as well. A European Parliament lawmaker dealing with Brexit sees a smaller risk now than before of failing to reach an agreement.

The analysts said that if a no-deal exit from the bloc was avoided the currency could strengthen another 5 to 10 percent in the coming months.

Against the dollar sterling edged higher 0.3% nearing a three-month high of $1.3295. Sterling dropped 0.2% against the single currency at 87.41 pence per euro.

Sources: Reuters, CNN money, BBC

PLEASE NOTE The information above is not investment advice.