In the commodity market, gold has retreated in early trading on Wednesday but has consolidated well above $1,800 after temporarily breaking below that level on Tuesday. The metal is currently down 0.20% to $1,810. The safe-haven has probably capped losses amid tensions between the US and China and the increasing number of COVID cases.
Oil prices have recovered from Monday losses after a sharp decline in US crude inventories. Markets are now focused on the OPEC+ meeting scheduled for today. Both crude brands have increased by 0.43%. The American Petroleum Institute reported that crude inventories dropped by 8.3 million barrels in the week ending July 10, which is fourfold compared to what analysts have expected. Nevertheless, the OPEC meeting might send bearish signals, as the cartel intends to ease its record production cuts.
In FX, the US dollar is on the defensive as investors turned to riskier assets on Moderna’s encouraging results. Also, the US reported that its inflation index beat forecasts by adding 0.6% in June, which is the highest monthly growth in about eight years. The increase in consumer prices eased investors’ concerns on deflationary pressures triggered by the crisis. The USD index is down 0.08% to 96.128.
The euro versus dollar rose to the highest level in four months on hopes that the European Union would reach consensus on stimulus. The EU’s summit, scheduled for later this week, might end up with a rescue financing package that would help the continent address the coronavirus crisis.
Finally, the British pound is up against the greenback but down against the euro. The UK’s Office for National Statistics released inflation data this morning, with CPI and Core CPI indexes beating analysts’ expectations.
By Strategy Desk
