Oil prices jumped by around 10% a day after the worst day in nearly 30 years as investors eyed the possibility of economic stimulus.
The U.S. President Trump said he will be taking steps to bolster the U.S. economy against the impact of the spreading coronavirus outbreak. Japan’s government plans to spend more than $4 billion in a second package of steps to cope with the virus.
Brent crude futures were up $3.36, nearly 10%, to $37.72 a barrel by 1041 GMT, after hitting a session high of $37.75 a barrel. WTI crude gained $3.14, or around 10%, to $34.27 a barrel, after hitting a high of $34.42.
Both benchmarks plunged 25% on Monday, dropping to their lowest levels since February 2016. Oil prices recorded their biggest one-day percentage declines since Jan. 17, 1991, when they fell at the outset of the first Gulf War.
Trading volumes in the front-month for both contracts hit record highs in the previous session after three years of cooperation between Saudi Arabia and Russia and other major oil producers to limit supply fell apart on Friday, triggering a price war for market share.
Commodity-linked currencies that tumbled on Monday following the crash in oil prices recovered slightly.
START TRADINGForex – Oil up 10% after the worst day since 1991
Investors turned hopeful that policymakers would introduce co-ordinated stimulus to cushion the economic impact of the coronavirus outbreak. Volatility has doubled in FX markets from the levels of late February, reaching its highest since early 2017.
The US dollar rebounded on Tuesday after huge losses against the yen and the euro. Against a basket of currencies, the dollar rose 0.5% to 95.865. The greenback rallied 2.2% against the yen to 104.6, considerably higher than Monday’s 101.18 low. Against the pound GBP=D3, the U.S. currency rose 0.5% to $1.3060.
The Canadian dollar rose 0.3% to C$1.3658.
The yen also fell against the euro and the Australian dollar. The Bank of Japan officials indicated they were ready to ramp up stimulus if necessary, before a policy meeting next week.
The euro dropped 0.7% versus the dollar to $1.1332, down from $1.1495 on Monday, its strongest since early January.
The dollar rose 0.8% to 0.9329 Swiss franc on Tuesday, recovering after three days of heavy selling pushed it to its lowest in almost five years. Data suggest the Swiss National Bank is now intervening to weaken its currency.
Gold prices fell more than 1% on Tuesday, pulling back after breaching $1,700 in the previous session. Risk sentiment improved and the dollar firmed on expected global support measures to soften the economic impact from the coronavirus.
Spot gold lost 1% to $1,662.56 an ounce by 1206 GMT. U.S. gold futures fell 0.7% to $1,663.70.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money